For period ending July 31, 2011 Exhibit 77(Q1)
File number 811-8764
SUB-ADVISORY AGREEMENT
Agreement dated as of March 23, 2011 between UBS Global Asset
Management (Americas) Inc. ("UBS Global AM"), a Delaware corporation,
and Xxxxxxx Xxxxx & Company L.L.C. ("Sub- Adviser"), a Delaware
Limited Liability Company (the "Agreement").
RECITALS
(1) UBS Global AM has entered into a Management Agreement dated as
of August 1, 2008 ("Management Agreement"), with PACE(r) Select
Advisors Trust ("Trust"), an open-end
management investment company registered under the Investment
Company Act of 1940, as amended ("1940 Act"), with respect to PACE(r)
International Emerging Markets Equity Investments ("Portfolio"); and
(2) UBS Global AM is authorized to retain one or more sub-advisers
to furnish certain investment advisory services to UBS Global AM and
the Portfolio;
(3) UBS Global AM desires to retain the Sub-Adviser to furnish
certain investment advisory services to UBS Global AM and the
Portfolio or a designated portion of the assets ("Segment") of
the Portfolio; and
(4) The Sub-Adviser is willing to furnish such services;
Now therefore, in consideration of the premises and mutual covenants
herein contained, UBS
Global AM and the Sub-Adviser agree as follows:
1. Appointment. UBS Global AM hereby appoints the Sub-Adviser as
an investment sub-adviser with respect to the Portfolio or Segment
for the period and on the terms set forth in this Agreement. The Sub-
Adviser accepts that appointment and agrees to render the services
herein
set forth, for the compensation herein provided.
2. Duties as Sub-Adviser.
(a) Subject to the supervision and direction of the Trust's Board
of Trustees (the "Board") and review by UBS Global AM, and any
written guidelines adopted by the Board or UBS Global AM the Sub-
Adviser will provide a continuous investment program for the
Portfolio or Segment, including investment research and discretionary
management with respect to all securities and investments
and cash equivalents in the Portfolio or Segment. The Sub-Adviser
will determine from time to
time what investments will be purchased, retained or sold by the
Portfolio or Segment. The Sub-Adviser will be responsible for
placing purchase and sell orders for investments and for other
related transactions for the Portfolio or Segment. The Sub-Adviser
understands that the Portfolio's assets need to be managed so as to
permit the Portfolio to qualify or to continue to qualify as a
regulated investment company under Subchapter M of the Internal
Revenue Code, as amended ("Code"). The Sub-Adviser will provide
services under this Agreement in accordance with the Portfolio's
investment objective, policies and restrictions as stated in the
Trust's currently effective registration statement under the 1940
Act, and any amendments or supplements thereto ("Registration
Statement"). The Sub-Adviser, on each business day, shall provide
UBS Global AM and the Trust's custodian such information as UBS Global
AM and the Trust's custodian may reasonably request relating to all
transactions concerning the Portfolio or Segment.
UBS Global AM hereby designates and appoints the Sub-Adviser as its
and the Portfolio's limited purpose agent and attorney-in-fact,
without further prior approval of UBS Global AM (except as expressly
provided for herein or as may be required by law) to make and
execute, in the name and on behalf of the Portfolio, all agreements,
instruments and other documents and to take all such other action
which the Sub-Adviser considers necessary or advisable to carry out
its duties hereunder. By way of example and not by way of limitation,
in connection with any purchase for the Portfolio or Segment of
securities or instruments that are not registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), the Sub-
Adviser shall have the full power and authority, among other things,
to: (i) commit to purchase such securities for the Portfolio on the
terms and conditions under which such securities are offered; (ii)
execute such account opening and other agreements, instruments and
documents (including, without limitation, purchase agreements,
subscription documents, ISDA and other swap and derivative
documents), and make such commitments, as may be required in
connection with the purchase and sale of such securities or
instruments; (iii) represent that the Portfolio is an "accredited
investor" as defined in Rule 501 (a) of Regulation D under the
Securities Act and a "Qualified Institutional Buyer" as defined in
Rule 144A (a) (1) (i) under the Securities Act; and (iv) commit that
such securities will not be offered or sold by the Portfolio except
in compliance with the registration requirements of the Securities
Act or an exemption therefrom. This power-of-attorney is a continuing
power-of-attorney and shall remain in full force and effect until
revoked by UBS Global AM or the Trust in writing, but any such
revocation shall not affect any transaction initiated prior to
receipt by the Sub-Adviser of such notice.
(b) The Sub-Adviser agrees that it will not consult with any other
sub-adviser ("Other Sub-Adviser") for the Trust or Portfolio
concerning any transaction by the Portfolio or Segment in securities
or other assets, including (i) the purchase by the Portfolio or
Segment of a security issued by the Other Sub-Adviser, or an
affiliate of the Other Sub-Adviser, to the Trust or Portfolio except
as permitted by the 1940 Act or (ii) transactions by the Portfolio or
Segment in any security for which the Other Sub-Adviser, or its
affiliate, is the principal underwriter.
(c) Unless otherwise instructed by UBS Global AM or the Trust, the
Sub-Adviser agrees that it will be responsible for voting proxies of
issuers of securities held by the Portfolio or Segment. The Sub-
Adviser further agrees that it will adopt written proxy voting
procedures that shall comply with the requirements of the 1940 Act
and the Investment Advisers Act of 1940, as amended ("Advisers Act")
("Proxy Voting Policy"), and that shall be acceptable to the Board.
The Sub-Adviser shall also provide its Proxy Voting Policy, and if
requested by UBS Global AM, a summary of such Proxy Voting Policy for
inclusion in the Trust's registration statement, and will provide UBS
Global AM with any material amendment to the Proxy Voting Policy
within a reasonable time after such amendment has taken effect. The
Sub-Adviser further agrees that it will provide the Board on or
before August 1st of each year, or more frequently as the Board may
reasonably request, with a written report of the proxies voted during
the most recent 12-month period ending June 30, or such other period
as the Board may designate, in a format that shall comply with the
1940 Act and that shall be acceptable to the Board.
(d) The Sub-Adviser agrees that upon the request of UBS Global AM or
the Board, Sub-Adviser shall exercise the rights incident to the
securities held by the Portfolio or Segment in the context of a
bankruptcy or other reorganization. The Sub-Adviser further agrees
that it will keep UBS Global AM fully informed about any such actions
that it intends to take.
(e) The Sub-Adviser agrees that it will place orders with brokers
in accordance with best execution policies, taking into account best
price as an important factor in this decision, provided that, on
behalf of the Portfolio or Segment, the Sub-Adviser may, in its
discretion, use brokers that provide the Sub-Adviser with research,
analysis, advice and similar services to execute portfolio
transactions on behalf of the Portfolio or Segment, and the Sub-
Adviser may pay to those brokers in return for brokerage and research
services a higher commission than may be charged by other brokers,
subject to the Sub-Adviser's determination in good faith that such
commission is reasonable in terms either of the particular
transaction or of the overall responsibility of the Sub-Adviser to
the Portfolio or Segment and its other clients and that the total
commissions paid by the Portfolio or Segment will be reasonable in
relation to the benefits to the Portfolio or Segment over the long
term. In no instance will portfolio securities be purchased from or
sold to UBS Global AM or the Sub-Adviser, the Trust's principal
underwriter, or any affiliated person thereof, except in accordance
with the federal securities laws and the rules and regulations
thereunder. The Sub-Adviser may aggregate sales and purchase orders
with respect to the assets of the Portfolio or Segment with similar
orders being made simultaneously for other accounts advised by the
Sub-Adviser or its affiliates. Whenever the Sub-Adviser
simultaneously places orders to purchase or sell the same security on
behalf of the Portfolio or Segment and one or more other accounts
advised by the Sub-Adviser, the orders will be allocated as to price
and amount among all such accounts in a manner believed to be
equitable over time to each account. UBS Global AM recognizes that
in some cases this procedure may adversely affect the results
obtained for the Portfolio or Segment.
Subject to the Sub-Adviser's obligations to seek best execution, UBS
Global AM agrees that the Sub-Adviser, in its sole discretion, may
place transactions on behalf of the Portfolio or Segment and the
Trust with any broker-dealer deemed to be an affiliate (including
affiliated FCMs) of the Sub-Adviser (the "Affiliated Broker-Dealers")
so long as such transactions are effected in conformity with the
requirements (including any applicable exemptions and administrative
interpretations set forth in Part II of the Sub-Adviser's Form ADV
Registration Statement on file with the Securities and Exchange
Commission ("Form ADV")) of Section 11(a)(1)(H) of the Securities
Exchange Act of 1934 (the "1934 Act"), and in compliance with Rules
17e-1 or 10f-3 under the 1940 Act or other applicable rules and the
Trust's policies and procedures thereunder. In all such dealings,
the Affiliated Broker-Dealers shall be authorized and entitled to
retain any commissions, remuneration or profits which may be made in
such transactions and shall not be liable to account for the same to
UBS Global AM, the Portfolio or the Trust. In the event Sub-Adviser
becomes affiliated (as deemed under the federal securities laws) with
a broker-dealer during the term of this Agreement, Sub-Adviser shall
obtain the approval of the Trust's Board of Trustees prior to
commencement of transactions with such broker-dealer on behalf of the
Portfolio or the Trust.
UBS Global AM further authorizes the Sub-Adviser and its Affiliated
Broker-Dealers to execute agency cross transactions (the "Cross
Transactions") on behalf of the Portfolio and the Trust. Cross
Transactions are transactions which may be effected by the Affiliated
Broker-Dealers acting for both the Portfolio or the Trust and the
counterparty to the transaction. Cross Transactions enable the Sub-
Adviser to purchase or sell a block of securities for the Portfolio
or the Trust at a set price and possibly avoid an unfavorable price
movement that may be created through entrance into the market with
such purchase or sale order. As such, the Sub-Adviser believes that
Cross Transactions can provide meaningful benefits for the Portfolio
and the Trust and its clients generally. UBS Global AM, the
Portfolio and the Trust should be aware, however, that in a Cross
Transaction an Affiliated Broker-Dealer will be receiving commissions
from both sides of the trade and, therefore, there is a potentially
conflicting division of loyalties and responsibilities. Sub-Adviser
shall effect such Cross Transactions in compliance with Rule 206(3)-2
under the Advisers Act, Rule 17a-7 under the 1940 Act, and any other
applicable provisions of the federal securities laws and shall
provide UBS Global AM with periodic reports describing such agency
cross transactions. UBS Global AM understands that the authority of
the Sub-Adviser to execute agency Cross Transactions for the
Portfolio is terminable at will without penalty, effective upon
receipt by the Sub-Adviser of written notice from UBS Global AM, and
that the failure to terminate such authorization will result in its
continuation.
(f) The Sub-Adviser shall maintain separate detailed records of all
matters pertaining to the Portfolio or Segment, including, without
limitation, brokerage and other records of all securities
transactions. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the 1940 Act that are prepared or maintained by the Sub-Adviser
on behalf of the Trust are the property of the Trust and will be
surrendered promptly to the Trust upon request. The Sub-Adviser
further agrees to preserve for the periods prescribed in
Rule 31a-2 under the 1940 Act the records required to be maintained
under Rule 31a-1 under the 1940 Act, and will furnish the Board and
UBS Global AM with such periodic and special reports as the Board or
UBS Global AM may request.
(g) At such times as shall be reasonably requested by the Board or
UBS Global AM, the Sub-Adviser will provide the Board and UBS Global
AM with economic and investment analyses and reports as well as
quarterly reports setting forth the performance of the Portfolio or
Segment and make available to the Board and UBS Global AM any
economic, statistical and investment services that the Sub-Adviser
normally makes available to its institutional or other customers.
(h) In accordance with procedures adopted by the Board, as amended
from time to time, the Sub-Adviser is responsible for assisting the
Board and UBS Global AM in the fair valuation of all portfolio
securities in the Portfolio or Segment and will use its reasonable
efforts to arrange for the provision of a price or prices from one or
more parties independent of the Sub-Adviser for each portfolio
security for which the custodian does not obtain prices in the
ordinary course of business from an automated pricing service.
The Sub-Adviser also will provide such information or perform such
additional acts as are customarily performed by a Sub-Adviser and may
be required for the Trust or UBS Global AM to comply with their
respective obligations under applicable federal securities laws,
including, without limitation, the
1940 Act, the Advisers Act, the 1934 Act, the Securities Act, and any
rule or regulation thereunder.
3. Further Duties. In all matters relating to the performance of
this Agreement, the Sub-Adviser will seek to act in conformity with
the Trust's Trust Instrument, By-Laws and Registration Statement, the
Trust's policies and procedures for compliance by the Trust with the
Federal Securities Laws (as that term is defined in Rule 38a-1 under
the 1940 Act) provided to the Sub-Adviser (together, the "Trust
Compliance Procedures") and with the written instructions and written
directions of the Board and UBS Global AM, and will comply with the
requirements of the 1940 Act, and the Advisers Act, and the rules
under each, the Code, and all other federal and state laws and
regulations applicable to the Trust and the Portfolio. UBS Global AM
agrees to provide to the Sub-Adviser copies of the Trust's Trust
Instrument, By-Laws, Registration Statement, Trust's Compliance
Procedures, written instructions and directions of the Board and UBS
Global AM, and any amendments or supplements to any of these
materials as soon as practicable after such materials become
available. UBS Global AM further agrees to identify to the Sub-
Adviser in writing any broker-dealers that are affiliated with UBS
Global AM (other than UBS Financial Services Inc. and UBS Global
Asset Management (US) Inc.).
In order to assist the Trust and the Trust's Chief Compliance Officer
(the "Trust CCO") to satisfy the requirements contained in Rule 38a-1
under the 1940 Act, the Sub-Adviser shall provide to the Trust CCO:
(i) direct access to the Sub-Adviser's chief compliance officer
and/or other senior compliance personnel, as reasonably requested by
the Trust CCO; (ii) quarterly reports confirming that the Sub-Adviser
has complied with the Trust Compliance Procedures in managing the
Portfolio or Segment; and (iii) quarterly certifications that there
were no Material Compliance Matters (as that term is defined by
Rule 38a-1(e)(2)) that arose under the Trust Compliance Procedures
that related to the Sub-Adviser's management of the Portfolio or Segment.
The Sub-Adviser shall promptly provide the Trust CCO with copies of:
(i) the Sub-Adviser's policies and procedures for compliance by the
Sub-Adviser with the Federal Securities Laws (together, the "Sub-
Adviser Compliance Procedures"), and (ii) any material changes to the
Sub-Adviser Compliance Procedures. The Sub-Adviser shall cooperate
fully with the Trust CCO so as to facilitate the Trust CCO's
performance of the Trust CCO's responsibilities under Rule 38a-1 to
review, evaluate and report to the Trust's Board on the operation of
the Sub-Adviser Compliance Procedures, and shall promptly report to
the Trust CCO any Material Compliance Matter arising under the Sub-
Adviser Compliance Procedures involving the Portfolio or Segment.
The Sub-Adviser shall provide to the Trust CCO: (i) quarterly
reports confirming the Sub-Adviser's compliance with the Sub-Adviser
Compliance Procedures in managing the Portfolio or Segment, and (ii)
certifications that there were no Material Compliance Matters
involving the Sub-Adviser that arose under the Sub-Adviser Compliance
Procedures that affected the Portfolio or Segment. At least
annually, the Sub-Adviser shall provide a certification to the Trust
CCO to the effect that the Sub-Adviser has in place and has
implemented policies and procedures that are reasonably designed to
ensure compliance by the Sub-Adviser with any applicable Federal
Securities Laws, subject to such interpretations as may be contained
in the Trust Compliance Procedures.
The Sub-Adviser will promptly provide UBS Global AM with information
(including information that is required to be disclosed in the
Trust's registration statement) with respect to the portfolio
managers responsible for the Portfolio or Segment and any changes in
the portfolio managers responsible for the Portfolio or Segment.
The Sub-Adviser will promptly notify UBS Global AM of any pending
investigation, material litigation, administrative proceeding or any
other significant regulatory inquiry.
The Sub-Adviser will cooperate promptly and fully with UBS Global AM
and/or the Trust in responding to any regulatory or compliance
examinations or inspections (including information requests) relating
to the Trust, the Portfolio or UBS Global AM brought by any
governmental or regulatory authorities having appropriate
jurisdiction (including, but not limited to, the Securities and
Exchange Commission ("SEC")).
4. Expenses. During the term of this Agreement, the Sub-Adviser
will bear all expenses incurred by it in connection with its services
under this Agreement. The Sub-Adviser shall not be responsible for
any expenses incurred by the Trust, the Portfolio or UBS Global AM,
except as otherwise specifically provided herein.
Upon request by UBS Global AM, Sub-Adviser agrees to reimburse UBS
Global AM or the Trust for costs associated with generating and
distributing any Registration Statement (as defined herein) for when
the Sub-Adviser is given a copy of a draft of such Registration
Statement and fails to promptly disclose to UBS Global AM facts then
known to the Sub-Adviser or its personnel that would require
disclosure (or amendments to disclosure) in the Fund's Registration
Statement in time for such disclosure or amendments to disclosure to
be included in such Registration Statement. The Sub-Adviser shall
bear all reasonable expenses of the Trust, if any, arising out of an
assignment or change in control of the Sub-Adviser.
5. Compensation.
(a) For the services provided and the expenses assumed by the Sub-
Adviser pursuant to this Agreement, UBS Global AM, not the Portfolio,
will pay to the Sub-Adviser a fee, computed daily and payable
monthly, at an annual rate of 0.60% on the first $100 million, and
0.55% on assets in excess of $100 million of the average daily net
assets of the Portfolio or Segment allocated to its management
(computed in the manner specified in the Management Agreement), and
will provide the Sub-Adviser with a schedule showing the manner in
which the fee was computed. If the Sub-Adviser is managing a
Segment, its fees will be based on the value of the assets of the
Portfolio within the Sub-Adviser's Segment.
(b) The fee shall be accrued daily and payable monthly to the Sub-
Adviser on or before the last business day of the next succeeding
calendar month.
(c) For those periods in which UBS Global AM has agreed to waive
all or a portion of its management fee, UBS Global AM may ask the
Sub-Adviser to waive the same proportion of its fees, but the Sub-
Adviser is under no obligation to do so.
(d) If this Agreement becomes effective or terminates before the
end of any month, the fee for the period from the effective date to
the end of the month or from the beginning of such month to the date
of termination, as the case may be, shall be pro-rated according to
the proportion which such period bears to the full month in that such
effectiveness or termination occurs.
6. Limitation of Liability.
(a) The Sub-Adviser shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Portfolio, the
Trust or its shareholders or by UBS Global AM in connection with the
matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
(b) In no event will the Sub-Adviser have any responsibility for
any other portfolio of the Trust, for any portion of the Portfolio
not managed by the Sub-Adviser or for the acts or omissions of any
Other Sub-Adviser to the Trust or Portfolio. In particular, in the
event the Sub-Adviser shall manage only a Segment of the Portfolio,
the Sub-Adviser shall have no responsibility for the Portfolio's
being in violation of any applicable law or regulation or investment
policy or restriction applicable to the Portfolio as a whole or for
the Portfolio's failing to qualify as a regulated investment company
under the Code, if the securities and other holdings of the Segment
of the Portfolio managed by the
Sub-Adviser are such that such Segment would not be in such violation
or fail to so qualify if such Segment were deemed a separate series
of the Trust or a separate regulated investment company under the
Code, unless such violation was due to the Sub-Advisers failure to
comply with written guidelines adopted by the Board or UBS Global AM
and provided to the Sub-Adviser.
Nothing in this section shall be deemed a limitation or waiver of any
obligation or duty that may not by law be limited or waived.
7. Representations of Sub-Adviser. The Sub-Adviser represents,
warrants and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment adviser
under the Advisers Act and will continue to be so registered for so
long as this Agreement remains in effect; (ii) is not prohibited by
the 1940 Act or the Advisers Act from performing the services
contemplated by this Agreement; (iii) has met, and will seek to
continue to meet for so long as this Agreement remains in effect, any
other applicable federal or state requirements, or the applicable
requirements of any regulatory or industry
self-regulatory agency, necessary to be met in order to perform the
services contemplated by this Agreement; (iv) has the authority to
enter into and perform the services contemplated by this Agreement;
and (v) will promptly notify UBS Global AM of the occurrence of any
event that would disqualify the Sub-Adviser from serving as an
investment adviser of an investment company pursuant to Section 9(a)
of the 1940 Act or otherwise.
(b) The Sub-Adviser has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-
1 under the Advisers Act and will provide UBS Global AM and the Board
with a copy of such code of ethics, together with evidence of its
adoption. Within fifteen days of the end of the last calendar quarter
of each year that this Agreement is in effect, a duly authorized
officer of the Sub-Adviser shall certify to UBS Global AM that the
Sub-Adviser has complied with the requirements of Rule 17j-1 during
the previous year and that there has been no material violation of
the Sub-Adviser's code of ethics or, if such a violation has
occurred, that appropriate action was taken in response to such
violation. Upon the written request of UBS Global AM, the Sub-Adviser
shall permit UBS Global AM, its employees or its agents to examine
the reports required to be made by the Sub-Adviser pursuant to Rule
17j-1(c)(1) and all other records relevant to the Sub-Adviser's code
of ethics.
(c) The Sub-Adviser has provided UBS Global AM with a copy of its
Form ADV, as most recently filed with the SEC, and promptly will
furnish a copy of all amendments to UBS Global AM at least annually.
(d) The Sub-Adviser will notify UBS Global AM of any change of
control of the Sub-Adviser, including any change of its general
partners or 25% shareholders or 25% limited partners, as applicable,
and any changes in the key personnel who are either the portfolio
manager(s) of the Portfolio or senior management of the Sub-Adviser,
in each case prior to or as soon after such change as possible.
(e) The Sub-Adviser agrees that neither it nor any of its
affiliates, will in any way refer directly or indirectly to its
relationship with the Trust, the Portfolio, UBS Global AM or any of
their respective affiliates in offering, marketing or other
promotional materials without the express written consent of UBS
Global AM.
(f) The Sub-Adviser hereby represents that it has implemented
policies and procedures that will prevent the disclosure by it, its
employees or its agents of the Trust's portfolio holdings to any
person or entity other than UBS Global AM, the Trust's custodian, or
other persons expressly designated by UBS Global AM. The Sub-Adviser
further represents that it implemented policies and procedures to
prevent it, its employees and agents from trading on the basis of any
material non-public information provided by UBS Global AM, the Trust,
their affiliates or agents.
8. Services Not Exclusive. The services furnished by the Sub-
Adviser hereunder are not to be deemed exclusive, and except as the
Sub-Adviser may otherwise agree in writing, the Sub-Adviser shall be
free to furnish similar services to others so long as its services
under this Agreement are not impaired thereby. Nothing in this
Agreement shall limit or restrict the right of any director, officer
or employee of the Sub-Adviser, who may also be a trustee, officer or
employee of the Trust, to engage in any other business or to devote
his or her time and attention in part to the management or other
aspects of any other business, whether of a similar nature or a
dissimilar nature.
9. Duration and Termination.
(a) This Agreement shall become effective upon the date first above
written, provided that this Agreement shall not take effect unless it
has first been approved (i) by a vote of a majority of those trustees
of the Trust who are not parties to this Agreement or interested
persons of any such party ("Independent Trustees"), cast in person at
a meeting called for the purpose of voting on such approval, and (ii)
by vote of a majority of the Portfolio's outstanding voting
securities, unless UBS Global AM has authority to enter into this
Agreement pursuant to exemptive relief from the SEC without a vote of
the Portfolio's outstanding voting securities.
(b) Unless sooner terminated as provided herein, this Agreement
shall continue in effect for two years from its effective date.
Thereafter, if not terminated, this Agreement shall continue
automatically for successive periods of twelve months each, provided
that such continuance is specifically approved at least annually (i)
by a vote of a majority of the Independent Trustees,
cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Board or by vote of a majority of the
outstanding voting securities of the Portfolio.
(c) Notwithstanding the foregoing, this Agreement may be terminated
at any time, without the payment of any penalty, by vote of the Board
or by a vote of a majority of the outstanding voting securities of
the Portfolio on 30 days written notice to the Sub-Adviser. This
Agreement may also be terminated, without the payment of any penalty,
by UBS Global AM; (i) upon 120 days written notice to the Sub-
Adviser; (ii) upon material breach by the Sub-Adviser of any of the
representations, warranties and agreements set forth in Paragraph 7
of this Agreement; or (iii) immediately if, in the reasonable
judgment of UBS Global AM, the Sub-Adviser becomes unable to
discharge its duties and obligations under this Agreement, including
circumstances such as financial insolvency of the Sub- Adviser or
other circumstances that could adversely affect the Portfolio. The
Sub-Adviser may terminate this Agreement at any time, without the
payment of any penalty, on 120 days written notice to UBS Global AM.
This Agreement will terminate automatically in the event of its
assignment or upon termination of the Investment Advisory Agreement,
as it relates to this Portfolio.
10. Amendment of this Agreement. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom enforcement
of the change, waiver, discharge or termination is sought. To the
extent required by applicable law, no amendment of this Agreement
shall be effective until approved (i) by a vote of a majority of the
Independent Trustees, and (ii) if the terms of this Agreement shall
have changed, by a vote of a majority of the Portfolio's outstanding
voting securities (except in the case of (ii), pursuant to the terms
and conditions of the SEC order permitting it to modify the Agreement
without such vote).
11. Governing Law. This Agreement shall be construed in accordance
with the 1940 Act and the laws of the State of New York, without
giving effect to the conflicts of laws principles thereof. To the
extent that the applicable laws of the State of New York conflict
with the applicable provisions of the 1940 Act, the latter shall
control.
12. Confidentiality. The Sub-Adviser will treat as proprietary and
confidential any information obtained in connection with its duties
hereunder, including all records and information pertaining to the
Portfolio and its prior, present or potential shareholders. The Sub-
Adviser will not use such information for any purpose other than the
performance of its responsibilities and duties hereunder. Such
information may not be disclosed except after prior notification to
and approval in writing by the Portfolio or if such disclosure is
expressly required or requested by applicable federal or state or
other regulatory authorities.
13. Use of Name.
(a) It is understood that the names UBS and PACE or any derivative
thereof or logo associated with that name is the valuable property of
UBS Global AM and/or its affiliates, and that Sub-Adviser has the
right to use such name (or derivative or logo) only with the approval
of UBS Global AM and only so long as UBS Global AM is Manager to the
Trust and/or the Portfolio.
(b) It is understood that the name Xxxxxxx Xxxxx & Company L.L.C. or
any derivative thereof or logo associated with those names, are the
valuable property of the Sub-Adviser and its affiliates and that the
Trust and/or the Portfolio have the right to use such names (or
derivative or logo) in offering materials of the Trust with the
approval of the Sub-Adviser and for so long as the Sub-Adviser is a
Sub-Adviser to the Portfolio. Upon termination of this Agreement,
the Trust shall forthwith cease to use such names (or derivatives or
logo).
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or
effect. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors. As used in this
Agreement, the terms majority of the outstanding voting securities,
affiliated person, interested person, assignment, broker, investment
adviser, net assets, sale, sell and security shall have the same
meanings as such terms have in the 1940 Act, subject to such
exemption as may be granted by the SEC by any rule, regulation or
order. Where the effect of a requirement of the federal securities
laws reflected in any provision of this Agreement is made less
restrictive by a rule, regulation or order of the SEC, whether of
special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order. This
Agreement may be signed in counterpart.
15. Notices. Any notice herein required is to be in writing and is
deemed to have been given to the Sub-Adviser or UBS Global AM upon
receipt of the same at their respective addresses set forth below.
All written notices required or permitted to be given under this
Agreement will be delivered by personal service, by postage mail
return receipt requested or by facsimile machine or a similar means
of same delivery which provides evidence of receipt (with a
confirming copy by mail as set forth herein). All notices provided
to UBS Global AM will be sent to the attention of: General Counsel,
UBS Global Asset Management (Americas) Inc., 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000. All notices provided to the Sub-
Adviser will be sent to the attention of: _________________________,
Xxxxxxx Xxxxx & Company, L.L.C, 000 X Xxxxx Xxxxxx, Xxxxxxx, XX
00000.
In witness whereof, the parties hereto have caused this instrument to
be executed by their duly authorized signatories as of the date and
year first above written.
UBS Global Asset Management (Americas) Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxxxxx: Xxx Xxxx, XX 00000
By:/s/Xxxx Xxxxxxx By:/s/Xxxxx Xxxxxxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxx Xxxxxxxxxx
Title: Director & Assoc. Gen. Title: Executive Director Counsel
Xxxxxxx Xxxxx & Company L.L.C.
000 X Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Attest:
By:/s/Xxxx Xxxxxxx By:/s/Xxxxxxx X. Xxxxx
Name: Xxxx Xxxxxxx Name: Xxxxxxx X. Xxxxx
Title: Senior CRM Title: COO
For period ending July 31, 2011 Exhibit 77(Q1)
File number 811-8764
INTERIM SUB-ADVISORY AGREEMENT
Interim agreement made as of June 12, 2011 between UBS GLOBAL ASSET
MANAGEMENT (AMERICAS) INC. ("UBS Global Americas"), a Delaware
corporation, and MONDRIAN INVESTMENT PARTNERS LIMITED ("Sub-
Adviser"), a limited company organized under the laws of the United
Kingdom (the "Agreement").
RECITALS
(1) UBS Global Americas has entered into a Management
Agreement dated as of August 1, 2008 ("Management Agreement") with
PACE Select Advisors Trust, an open-end management investment company
registered under the Investment Company Act of 1940, as amended
("1940 Act"), with respect to PACE International Equity Investments
("Portfolio");
(2) UBS Global Americas has been notified by the Sub-Adviser
that a transaction will occur on or about July 12, 2011 which will
result in an assignment of the prior agreement between the parties
and will thus terminate the prior agreement;
(3) UBS Global Americas desires to continue to retain the
Sub-Adviser to furnish certain investment advisory services to UBS
Global Americas and the Portfolio or a designated portion of the
assets ("Segment") of the Portfolio; and
(4) The Sub-Adviser is willing to continue to furnish such services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, UBS Global Americas and the Sub-Adviser
agree as follows:
1. APPOINTMENT. Effective as of the assignment referred to
above, UBS Global Americas hereby appoints the Sub-Adviser as an
investment sub-adviser with respect to the Portfolio or Segment for
the period and on the terms set forth in this Agreement. The Sub-
Adviser accepts that appointment and agrees to render the services
herein set forth, for the compensation herein provided.
2. DUTIES AS SUB-ADVISER.
(a) Subject to the supervision and direction of the Trust's
Board of Trustees (the "Board") and review by UBS Global Americas,
and any written guidelines adopted by the Board or UBS Global
Americas, the Sub-Adviser will provide a continuous investment
program for the Portfolio or Segment, including investment research
and discretionary management with respect to all securities and
investments and cash equivalents in the Portfolio or Segment. The
Sub-Adviser will determine from time to time what investments will be
purchased, retained or sold by the Portfolio or Segment. The Sub-
Adviser will be responsible for placing purchase and sell orders for
investments and for other related transactions for the Portfolio or
Segment. The Sub-Adviser understands that the Portfolio's assets need
to be managed so as to permit the Portfolio to qualify or to continue
to qualify as a regulated investment company under Subchapter M of
the Internal Revenue Code, as amended ("Code"). The Sub-Adviser will
provide services under this Agreement in accordance with the
Portfolio's investment objective, policies and restrictions as stated
in the Trust's currently effective registration statement under the
1940 Act, and any amendments or supplements thereto ("Registration
Statement").
(b) The Sub-Adviser agrees that it will not consult with any
other sub-adviser ("Other Sub-Adviser") for the Trust or Portfolio
concerning any transaction by the Portfolio or Segment in securities
or other assets, including (i) the purchase by the Portfolio or
Segment of a security issued by the Other Sub-Adviser, or an
affiliate of the Other Sub-Adviser, to the Trust or Portfolio except
as permitted by the 1940 Act or (ii) transactions by the Portfolio or
Segment in any security for which the Other Sub-Adviser, or its
affiliate, is the principal underwriter.
(c) The Sub-Adviser agrees that it will be responsible for
voting proxies of issuers of securities held by the Portfolio or
Segment. The Sub-Adviser further agrees that it will adopt written
proxy voting procedures that shall comply with the requirements of
the 1940 Act and the Investment Advisers Act of 1940, as amended
("Advisers Act"), and that shall be acceptable to the Board. The Sub-
Adviser further agrees that it will provide the Board on or before
August 1st of each year, or more frequently as the Board may
reasonably request, with a written report of the proxies voted during
the most recent 12-month period ending June 30, or such other period
as the Board may designate, in a format that shall comply with the
1940 Act and that shall be acceptable to the Board.
(d) The Sub-Adviser agrees that, in placing orders with
brokers, it will seek to obtain the best net result in terms of price
and execution; provided that, on behalf of the Portfolio or Segment,
the Sub-Adviser may, in its discretion, use brokers that provide the
Sub-Adviser with research, analysis, advice and similar services to
execute portfolio transactions on behalf of the Portfolio or Segment,
and the Sub-Adviser may pay to those brokers in return for brokerage
and research services a higher commission than may be charged by
other brokers, subject to the Sub-Adviser's determination in good
faith that such commission is reasonable in terms either of the
particular transaction or of the overall responsibility of the Sub-
Adviser to the Portfolio or Segment and its other clients and that
the total commissions paid by the Portfolio or Segment will be
reasonable in relation to the benefits to the Portfolio or Segment
over the long term. In no instance will portfolio securities be
purchased from or sold to UBS Global Americas or the Sub-Adviser, or
any affiliated person thereof, except in accordance with the federal
securities laws and the rules and regulations thereunder. The Sub-
Adviser may aggregate sales and purchase orders with respect to the
assets of the Portfolio or Segment with similar orders being made
simultaneously for other accounts advised by the Sub-Adviser or its
affiliates. Whenever the Sub-Adviser simultaneously places orders to
purchase or sell the same security on behalf of the Portfolio or
Segment and one or more other accounts advised by the Sub-Adviser,
the orders will be allocated as to price and amount among all such
accounts in a manner believed to be equitable over time to each
account. UBS Global Americas recognizes that in some cases this
procedure may adversely affect the results obtained for the Portfolio
or Segment.
Subject to the Sub-Adviser's obligations to seek best
execution, UBS Global Americas agrees that the Sub-Adviser, in its
sole discretion, may place transactions on behalf of the Portfolio or
Segment and the Trust with any broker-dealer deemed to be an
affiliate of the Sub-Adviser (the "Affiliated Broker-Dealers") so
long as such transactions are effected in conformity with the
requirements (including any applicable exemptions and administrative
interpretations set forth in Part II of the Sub-Adviser's Form ADV
Registration Statement on file with the Securities and Exchange
Commission ("Form ADV")) of Section 11(a)(1)(H) of the Securities
Exchange Act of 1934. In all such dealings, the Affiliated Broker-
Dealers shall be authorized and entitled to retain any commissions,
remuneration or profits which may be made in such transactions and
shall not be liable to account for the same to UBS Global Americas,
the Series or the Trust.
UBS Global Americas further authorizes the Sub-Adviser and
its Affiliated Broker-Dealers to execute agency cross transactions
(the "Cross Transactions") on behalf of the Series and the Trust.
Cross Transactions are transactions which may be effected by the
Affiliated Broker-Dealers acting for both the Series or the Trust and
the counterparty to the transaction. Cross Transactions enable the
Sub-Adviser to purchase or sell a block of securities for the Series
or the Trust at a set price and possibly avoid an unfavorable price
movement that may be created through entrance into the market with
such purchase or sale order. As such, the Sub-Adviser believes that
Cross Transactions can provide meaningful benefits for the Series and
the Trust and its clients generally. UBS Global Americas, the Series
and the Trust should be aware, however, that in a Cross Transaction
an Affiliated Broker-Dealer will be receiving commissions from both
sides of the trade and, therefore, there is a potentially conflicting
division of loyalties and responsibilities.
(e) The Sub-Adviser will maintain all books and records
required to be maintained pursuant to Rule 31a-1(b)(2)(ii), (3), (5),
(6), (7), (9) and (10) under the 1940 Act and the rules and
regulations promulgated thereunder with respect to transactions by
the Sub-Adviser on behalf of the Portfolio or Segment, and will
furnish the Board and UBS Global Americas with such periodic and
special reports as the Board or UBS Global Americas reasonably may
request. In compliance with the requirements of Rule 31a-3 under the
1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Portfolio or Segment are the property of the Trust,
agrees to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act any records that it maintains for the Portfolio or Segment
and that are required to be maintained by Rule 31a-1 under the 1940
Act, and further agrees to surrender promptly to the Trust any
records which it maintains for the Portfolio or Segment upon request
by the Trust.
(f) At such times as shall be reasonably requested by the
Board or UBS Global Americas, the Sub-Adviser will provide the Board
and UBS Global Americas with economic and investment analyses and
reports as well as quarterly reports setting forth the performance of
the Portfolio or Segment and make available to the Board and UBS
Global Americas any economic, statistical and investment services
that the Sub-Adviser normally makes available to its institutional or
other customers.
(g) In accordance with procedures adopted by the Board, as
amended from time to time, the Sub-Adviser is responsible for
assisting in the fair valuation of all portfolio securities in the
Portfolio or Segment and will use its reasonable efforts to arrange
for the provision of a price or prices from one or more parties
independent of the Sub-Adviser for each portfolio security for which
the custodian does not obtain prices in the ordinary course of
business from an automated pricing service.
3. FURTHER DUTIES. In all matters relating to the performance
of this Agreement, the Sub-Adviser will seek to act in conformity
with the Trust's Trust Instrument, By-Laws and Registration Statement
and with the written instructions and written directions of the Board
and UBS Global Americas; and will comply with the requirements of the
1940 Act, and the Advisers Act, and the rules under each, the Code,
and all other federal and state laws and regulations applicable to
the Trust and the Portfolio. UBS Global Americas agrees to provide to
the Sub-Adviser copies of the Trust's Trust Instrument, By-Laws,
Registration Statement, written instructions and directions of the
Board and UBS Global Americas, and any amendments or supplements to
any of these materials as soon as practicable after such materials
become available; and further agrees to identify to the Sub-Adviser
in writing any broker-dealers that are affiliated with UBS Global
Americas (other than UBS Financial Services Inc.).
4. EXPENSES. During the term of this Agreement, the Sub-
Adviser will bear all expenses incurred by it in connection with its
services under this Agreement. The Sub-Adviser shall not be
responsible for any expenses incurred by the Trust, the Portfolio or
UBS Global Americas.
5. COMPENSATION. For the services provided and the expenses
assumed by the Sub-Adviser during the term of this Agreement, the
Sub-Adviser shall not be entitled to receive any compensation from
UBS Global Americas or the Portfolio.
6. LIMITATION OF LIABILITY.
(a) The Sub-Adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Portfolio,
the Trust or its shareholders or by UBS Global Americas in connection
with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement.
(b) In no event will the Sub-Adviser have any responsibility
for any other portfolio of the Trust, for any portion of the
Portfolio not managed by the Sub-Adviser or for the acts or omissions
of any Other Sub-Adviser to the Trust or Portfolio.
In particular, in the event the Sub-Adviser shall manage only
a Segment of the Portfolio, the Sub-Adviser shall have no
responsibility for the Portfolio's being in violation of any
applicable law or regulation or investment policy or restriction
applicable to the Portfolio as a whole or for the Portfolio's failing
to qualify as a regulated investment company under the Code, if the
securities and other holdings of the Segment of the Portfolio managed
by the Sub-Adviser are such that such Segment would not be in such
violation or fail to so qualify if such Segment were deemed a
separate series of the Trust or a separate "regulated investment
company" under the Code.
Nothing in this section shall be deemed a limitation or
waiver of any obligation or duty that may not by law be limited or
waived.
7. REPRESENTATIONS OF SUB-ADVISER. The Sub-Adviser
represents, warrants and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment
adviser under the Advisers Act and will continue to be so registered
for so long as this Agreement remains in effect; (ii) is not
prohibited by the 1940 Act or the Advisers Act from performing the
services contemplated by this Agreement; (iii) has met, and will seek
to continue to meet for so long as this Agreement remains in effect,
any other applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency,
necessary to be met in order to perform the services contemplated by
this Agreement; (iv) has the authority to enter into and perform the
services contemplated by this Agreement; and (v) will promptly notify
UBS Global Americas of the occurrence of any event that would
disqualify the Sub-Adviser from serving as an investment adviser of
an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.
(b) The Sub-Adviser has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act and
will provide UBS Global Americas and the Board with a copy of such
code of ethics, together with evidence of its adoption. Within
fifteen days of the end of the last calendar quarter of each year
that this Agreement is in effect, a duly authorized officer of the
Sub-Adviser shall certify to UBS Global Americas that the Sub-Adviser
has complied with the requirements of Rule 17j-1 during the previous
year and that there has been no material violation of the Sub-
Adviser's code of ethics or, if such a violation has occurred, that
appropriate action was taken in response to such violation. Upon the
written request of UBS Global Americas, the Sub-Adviser shall permit
UBS Global Americas, its employees or its agents to examine the
reports required to be made by the Sub-Adviser pursuant to Rule 17j-1
and all other records relevant to the Sub-Adviser's code of ethics.
(c) The Sub-Adviser has provided UBS Global Americas with a
copy of its Form ADV, as most recently filed with the Securities and
Exchange Commission ("SEC"), and promptly will furnish a copy of all
amendments to UBS Global Americas at least annually. In addition, the
Sub-Adviser has provided UBS Global Americas with certain disclosures
required by the U.K. Financial Services Authority.
(d) The Sub-Adviser will notify UBS Global Americas of any
change of control of the Sub-Adviser, including any change of its
general partners or 25% shareholders or 25% limited partners, as
applicable, and any changes in the key personnel who are either the
portfolio manager(s) of the Portfolio or senior management of the
Sub-Adviser, in each case prior to or promptly after such change.
(e) UBS Global Americas and the Sub-Adviser agree that
neither of them nor any of their affiliates, will in any way refer
directly or indirectly to their relationship with one another or any
of their respective affiliates in offering, marketing or other
promotional materials without the express written consent of the
other, which consent will be promptly provided and not unreasonably
withheld.
8. SERVICES NOT EXCLUSIVE. The services furnished by the Sub-
Adviser hereunder are not to be deemed exclusive, and except as the
Sub-Adviser may otherwise agree in writing, the Sub-Adviser shall be
free to furnish similar services to others so long as its services
under this Agreement are not impaired thereby. Nothing in this
Agreement shall limit or restrict the right of any director, officer
or employee of the Sub-Adviser, who may also be a trustee, officer or
employee of the Trust, to engage in any other business or to devote
his or her time and attention in part to the management or other
aspects of any other business, whether of a similar nature or a
dissimilar nature.
9. DURATION AND TERMINATION.
(a) This Agreement shall become effective upon the date first
above written, provided that this Agreement shall not take effect
unless it has first been approved (i) by a vote of a majority of
those trustees of the Trust who are not parties to this Agreement or
interested persons of any such party ("Independent Trustees"), cast
in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of the Portfolio's
outstanding voting securities, unless UBS Global Americas has
authority to enter into this Agreement pursuant to exemptive relief
from the SEC without a vote of the Portfolio's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this
Agreement shall continue in effect for one hundred and fifty (150)
days from its effective date.
(c) Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty, by vote
of the Board or by a vote of a majority of the outstanding voting
securities of the Portfolio on 10 days' written notice to the Sub-
Adviser. This Agreement may also be terminated, without the payment
of any penalty, by UBS Global Americas: (i) upon 120 days' written
notice to the Sub-Adviser; (ii) upon material breach by the Sub-
Adviser of any of the representations, warranties and agreements set
forth in Paragraph 7 of this Agreement; or (iii) immediately if, in
the reasonable judgment of UBS Global Americas, the Sub-Adviser
becomes unable to discharge its duties and obligations under this
Agreement, including circumstances such as financial insolvency of
the Sub-Adviser or other circumstances that could adversely affect
the Portfolio. The Sub-Adviser may terminate this Agreement at any
time, without the payment of any penalty, on 120 days' written notice
to UBS Global Americas. This Agreement will terminate automatically
in the event of its assignment or upon termination of the Management
Agreement, as it relates to this Portfolio.
10. AMENDMENT OF THIS AGREEMENT. No provision of this
Agreement may be changed, waived, discharged or terminated orally,
but only by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is
sought. To the extent required by applicable law, no amendment of
this Agreement shall be effective until approved (i) by a vote of a
majority of the Independent Trustees, and (ii) if the terms of this
Agreement shall have changed, by a vote of a majority of the
Portfolio's outstanding voting securities (except in the case of
(ii), pursuant to the terms and conditions of the SEC order
permitting it to modify the Agreement without such vote).
11. GOVERNING LAW. This Agreement shall be construed in
accordance with the 1940 Act and the laws of the State of New York,
without giving effect to the conflicts of laws principles thereof. To
the extent that the applicable laws of the State of New York conflict
with the applicable provisions of the 1940 Act, the latter shall
control.
12. MISCELLANEOUS. The captions in this Agreement are
included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their
construction or effect. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"affiliated person," "interested person," "assignment," "broker,"
"investment adviser," "net assets," "sale," "sell" and "security"
shall have the same meanings as such terms have in the 1940 Act,
subject to such exemption as may be granted by the SEC by any rule,
regulation or order. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Agreement is made
less restrictive by a rule, regulation or order of the SEC, whether
of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order. This
Agreement may be signed in counterpart.
13. NOTICES. Any notice herein required is to be in writing
and is deemed to have been given to the Sub-Adviser or UBS Global
Americas upon receipt of the same at their respective addresses set
forth below. All written notices required or permitted to be given
under this Agreement will be delivered by personal service, by
postage mail return receipt requested or by facsimile machine or a
similar means of same delivery which provides evidence of receipt
(with a confirming copy by mail as set forth herein).
All notices provided to UBS Global Americas will be sent to the attention of:
General Counsel
UBS Global Asset Management (Americas) Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
All notices provided to the Sub-Adviser will be sent to the attention of:
Mondrian Investment Partners Limited
5th Floor
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Tel: 000-00-000-000-0000
Fax: 000-00-000-000-0000
Attn: Xxxxx X. Xxxxxx
with a copy to:
Mondrian Investment Partners (U.S.), Inc.
Two Commerce Square
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Tel: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx, III
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed by their duly authorized signatories as of the date and year first
above written.
UBS GLOBAL ASSET MANAGEMENT (AMERICAS) INC.
0 Xxxxx Xxxxxx Xxxxx
Xxxxxx: Xxxxxxx, Xxxxxxxx 00000
By:/s/Xxxx Xxxxxxx By:/s/Xxxxxx X. Xxxxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Director Title: Executive Director
MONDRIAN INVESTMENT PARTNERS LIMITED
5th Floor
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attest:
By: /s/Xxxxx Xxxxxx By: /s/Xxxxx Xxx
Name: Xxxxx Xxxxxx Name: Xxxxx Xxx
Title: Personal Assistant Title: Deputy Chief Executive Officer
For period ending July 31, 2011 Exhibit 77(Q1)
File number 811-8764
INTERIM SUB-ADVISORY AGREEMENT
Interim agreement made as of June 12, 2011 between UBS GLOBAL
ASSET MANAGEMENT (AMERICAS) INC., a Delaware corporation ("UBS Global
Americas"), and MONDRIAN INVESTMENT PARTNERS LIMITED ("Sub-Adviser"),
a limited company organized under the laws of the United Kingdom (the
"Agreement").
RECITALS
(1) UBS Global Americas has entered into a Management
Agreement dated as of August 1, 2008 ("Management Agreement") with
PACE Select Advisors Trust, an open-end management investment company
registered under the Investment Company Act of 1940, as amended
("1940 Act"), with respect to PACE International Emerging Markets
Equity Investments ("Portfolio");
(2) UBS Global Americas has been notified by the Sub-Adviser
that a transaction will occur on or about July 12, 2011 which will
result in an assignment of the prior agreement between the parties
and will thus terminate the prior agreement;
(3) UBS Global Americas desires to continue to retain the
Sub-Adviser to furnish certain investment advisory services to UBS
Global Americas and the Portfolio or a designated portion of the
assets ("Segment") of the Portfolio; and
(4) The Sub-Adviser is willing to continue to furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, UBS Global Americas and the Sub-Adviser
agree as follows:
1. APPOINTMENT. Effective as of the assignment referred to
above, UBS Global Americas hereby appoints the Sub-Adviser as an
investment Sub-Adviser with respect to the Portfolio or Segment for
the period and on the terms set forth in this Agreement. The Sub-
Adviser accepts that appointment and agrees to render the services
herein set forth, for the compensation herein provided.
2. DUTIES AS SUB-ADVISER.
(a) Subject to the supervision and direction of the Trust's
Board of Trustees (the "Board") and review by UBS Global Americas,
and any written guidelines adopted by the Board or UBS Global
Americas, the Sub-Adviser will provide a continuous investment
program for the Portfolio or Segment, all or a designated portion of
the assets, including investment research and discretionary
management with respect to all securities and investments and cash
equivalents in the Portfolio or Segment. The Sub-Adviser will
determine from time to time what investments will be purchased,
retained or sold by the Portfolio or Segment. The Sub-Adviser will be
responsible for placing purchase and sell orders for investments and
for other related transactions for the Portfolio or Segment. The Sub-
Adviser understands that the Portfolio's assets need to be managed so
as to permit the Portfolio to qualify or to continue to qualify as a
regulated investment company under Subchapter M of the Internal
Revenue Code, as amended ("Code"). The Sub-Adviser will provide
services under this Agreement in accordance with the Portfolio's
investment objective, policies and restrictions as stated in the
Trust's currently effective registration statement under the 1940
Act, and any amendments or supplements thereto ("Registration
Statement").
(b) The Sub-Adviser agrees that it will not consult with any
other Sub-Adviser ("Other Sub-Adviser") for the Trust or Portfolio
concerning any transaction by the Portfolio or Segment in securities
or other assets, including (i) the purchase by the Portfolio or
Segment of a security issued by the Other Sub-Adviser, or an
affiliate of the Other Sub-Adviser, to the Trust or Portfolio except
as permitted by the 1940 Act or (ii) transactions by the Portfolio or
Segment in any security for which the Other Sub-Adviser, or its
affiliate, is the principal underwriter.
(c) The Sub-Adviser agrees that it will be responsible for
voting proxies of issuers of securities held by the Portfolio or
Segment. The Sub-Adviser further agrees that it will adopt written
proxy voting procedures that shall comply with the requirements of
the 1940 Act and the Investment Advisers Act of 1940, as amended
("Advisers Act"), and that shall be acceptable to the Board. The
Sub-Adviser further agrees that it will provide the Board on or
before August 1st of each year, or more frequently as the Board may
reasonably request, with a written report of the proxies voted during
the most recent 12-month period ending June 30, or such other period
as the Board may designate, in a format that shall comply with the
1940 Act and that shall be acceptable to the
Board.
(d) The Sub-Adviser agrees that, in placing orders with
brokers, it will obtain the best net result in terms of price and
execution. The Sub-Adviser may aggregate sales and purchase orders
with respect to the assets of the Portfolio or Segment with similar
orders being made simultaneously for other accounts advised by the
Sub-Adviser or its affiliates. Whenever the Sub-Adviser
simultaneously places orders to purchase or sell the same security on
behalf of the Portfolio or Segment and one or more other accounts
advised by the Sub-Adviser, the orders will be allocated as to price
and amount among all such accounts in a manner believed to be
equitable over time to each account. UBS Global Americas recognizes
that in some cases this procedure may adversely affect the results
obtained for the Portfolio or Segment.
Subject to the Sub-Adviser's obligations to seek best
execution, UBS Global Americas agrees that the Sub-Adviser, in its
sole discretion, may place transactions on behalf of the Portfolio or
Segment and the Trust with any broker-dealer deemed to be an
affiliate of the Sub-Adviser (the "Affiliated Broker-Dealers") so
long as such transactions are effected in conformity with the
requirements (including any applicable exemptions and administrative
interpretations set forth in Part II of the Sub-Adviser's Form ADV
Registration Statement on file with the Securities and Exchange
Commission ("Form ADV")) of Section 11(a)(1)(H) of the Securities
Exchange Act of 1934. In all such dealings, the Affiliated Broker-
Dealers shall be authorized and entitled to retain any commissions,
remuneration or profits which may be made in such transactions and
shall not be liable to account for the same to UBS Global Americas,
the Portfolio or the Trust.
UBS Global Americas further authorizes the Sub-Adviser and
its Affiliated Broker-Dealers to execute agency cross transactions
(the "Cross Transactions") on behalf of the Portfolio and the Trust.
Cross Transactions are transactions which may be effected by the
Affiliated Broker-Dealers acting for both the Portfolio or the Trust
and the counterparty to the transaction. Cross Transactions enable
the Sub-Adviser to purchase or sell a block of securities for the
Portfolio or the Trust at a set price and possibly avoid an
unfavorable price movement that may be created through entrance into
the market with such purchase or sale order. As such, the Sub-Adviser
believes that Cross Transactions can provide meaningful benefits for
the Portfolio and the Trust and its clients generally. UBS Global
Americas, the Portfolio and the Trust should be aware, however, that
in a Cross Transaction an Affiliated Broker-Dealer will be receiving
commissions from both sides of the trade and, therefore, there is a
potentially conflicting division of loyalties and responsibilities.
(e) The Sub-Adviser will maintain all books and records
required to be maintained pursuant to Rule 31a-1(b)(2)(ii)(3), (5),
(6), (7), (9) and (10) under the 1940 Act and the rules and
regulations promulgated thereunder with respect to transactions by
the Sub-Adviser on behalf of the Portfolio or Segment, and will
furnish the Board and UBS Global Americas with such periodic and
special reports as the Board or UBS Global Americas reasonably may
request. In compliance with the requirements of Rule 31a-3 under the
1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Portfolio or Segment are the property of the Trust,
agrees to preserve for the periods prescribed by Rule 31a-2 under the
1940 Act any records which it maintains for the Portfolio or Segment
and which are required to be maintained by Rule 31a-1 under the 1940
Act, and further agrees to surrender promptly to the Trust any
records which it maintains for the Portfolio or Segment upon request
by the Trust.
(f) At such times as shall be reasonably requested by the
Board or UBS Global Americas, the Sub-Adviser will provide the Board
and UBS Global Americas with economic and investment analyses and
reports as well as quarterly reports setting forth the performance of
the Portfolio or Segment and make available to the Board and UBS
Global Americas any economic, statistical and investment services
that the Sub-Adviser normally makes available to its institutional or
other customers.
(g) In accordance with procedures adopted by the Board, as
amended from time to time, the Sub-Adviser is responsible for
assisting in the fair valuation of all portfolio securities in the
Portfolio or Segment and will use its reasonable efforts to arrange
for the provision of a price or prices from one or more parties
independent of the Sub-Adviser for each portfolio security for which
the custodian does not obtain prices in the ordinary course of
business from an automated pricing service.
3. FURTHER DUTIES. In all matters relating to the performance
of this Agreement, the Sub-Adviser will seek to act in conformity
with the Trust's Trust Instrument, By-Laws and Registration Statement
and with the written instructions and written directions of the Board
and UBS Global Americas and will comply with the applicable
requirements of the 1940 Act, the Advisers Act, and the rules under
each, the Code, and all other federal and state laws and regulations
applicable to the Trust and the Portfolio. UBS Global Americas agrees
to provide to the Sub-Adviser copies of the Trust's Trust Instrument,
By-Laws, Registration Statement, written instructions and directions
of the Board and UBS Global Americas, and any amendments or
supplements to any of these materials as soon as practicable after
such materials become available; provided, however, that the Sub-
Adviser's duty under this Agreement to act in conformity with any
document, instruction or guideline produced by the Trust or UBS
Global Americas shall not arise until it has been delivered to the
Sub-Adviser. Any changes to the objectives, policies and restrictions
will make due allowance for the time within which the Sub-Adviser
shall have to come into compliance. UBS Global Americas further
agrees to identify to the Sub-Adviser in writing any broker-dealers
that are affiliated with UBS Global Americas (other than UBS
Financial Services Inc.).
4. EXPENSES. During the term of this Agreement, the Sub-
Adviser will bear all expenses incurred by it in connection with its
services under this Agreement. The Sub-Adviser shall not be
responsible for any expenses incurred by the Trust, the Portfolio or
UBS Global Americas.
5. COMPENSATION. For the services provided and the expenses
assumed by the Sub-Adviser during the term of this Agreement, the
Sub-Adviser shall not be entitled to receive any compensation from
UBS Global Americas or the Portfolio.
6. LIMITATION OF LIABILITY.
(a) The Sub-Adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Portfolio,
the Trust or its shareholders or by UBS Global Americas in connection
with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement.
(b) In no event will the Sub-Adviser have any responsibility
for any other portfolio of the Trust, for any portion of the
Portfolio not managed by the Sub-Adviser or for the acts or omissions
of any Other Sub-Adviser to the Trust or Portfolio.
In particular, in the event the Sub-Adviser shall manage only
a portion of the Portfolio's Segment of the Portfolio, the Sub-
Adviser shall have no responsibility for the Portfolio's being in
violation of any applicable law or regulation or investment policy or
restriction applicable to the Portfolio as a whole or for the
Portfolio's failing to qualify as a regulated investment company
under the Code, if the securities and other holdings of the Segment
of the Portfolio managed by the Sub-Adviser are such that such
Segment would not be in such violation or fail to so qualify if such
Segment were deemed a separate series of the Trust or a separate
"regulated investment company" under the Code.
7. REPRESENTATIONS OF SUB-ADVISER. The Sub-Adviser
represents, warrants and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment
adviser under the Advisers Act and will continue to be so registered
for so long as this Agreement remains in effect; (ii) is not
prohibited by the 1940 Act or the Advisers Act from performing the
services contemplated by this Agreement; (iii) has met, and will seek
to continue to meet for so long as this Agreement remains in effect,
any other applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency,
necessary to be met in order to perform the services contemplated by
this Agreement; (iv) has the authority to enter into and perform the
services contemplated by this Agreement; and (v) will promptly notify
UBS Global Americas of the occurrence of any event that would
disqualify the Sub-Adviser from serving as an investment adviser of
an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.
(b) The Sub-Adviser has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act and
will provide UBS Global Americas and the Board with a copy of such
code of ethics, together with evidence of its adoption. Within
fifteen days of the end of the last calendar quarter of each year
that this Agreement is in effect, a duly authorized officer of the
Sub-Adviser shall certify to UBS Global Americas that the Sub-Adviser
has complied with the requirements of Rule 17j-1 during the previous
year and that there has been no violation of the Sub-Adviser's code
of ethics or, if such a violation has occurred, that appropriate
action was taken in response to such violation. Upon the written
request of UBS Global Americas, the Sub-Adviser shall permit UBS
Global Americas, its employees or its agents to examine the reports
required to be made by the Sub-Adviser pursuant to Rule 17j-1(c)(1)
and all other records relevant to the Sub-Adviser's code of ethics.
(c) The Sub-Adviser has provided UBS Global Americas with a
copy of its Form ADV as most recently filed with the Securities and
Exchange Commission ("SEC") and promptly will furnish a copy of all
amendments to UBS Global Americas at least annually.
(d) The Sub-Adviser will notify UBS Global Americas of any
change of control of the Sub-Adviser, including any change of its
general partners or 25% shareholders or 25% limited partners, as
applicable, and any changes in the key personnel who are either the
portfolio manager(s) of the Portfolio or senior management of the
Sub-Adviser, in each case prior to or promptly after such change.
(e) UBS Global Americas and the Sub-Adviser agree that
neither of them nor any of their affiliates, will in any way refer
directly or indirectly to their relationship with one another or any
of their respective affiliates in offering, marketing or other
promotional materials without the express written consent of the
other, which consent will be promptly provided and not unreasonably
withheld.
8. SERVICES NOT EXCLUSIVE. The services furnished by the Sub-
Adviser hereunder are not to be deemed exclusive, and except as the
Sub-Adviser may otherwise agree in writing, the Sub-Adviser shall be
free to furnish similar services to others so long as its services
under this Agreement are not impaired thereby. Nothing in this
Agreement shall limit or restrict the right of any director, officer
or employee of the Sub-Adviser, who may also be a trustee, officer or
employee of the Trust, to engage in any other business or to devote
his or her time and attention in part to the management or other
aspects of any other business, whether of a similar nature or a
dissimilar nature.
9. DURATION AND TERMINATION.
(a) This Agreement shall become effective upon the date first
above written, provided that this Agreement shall not take effect
unless it has first been approved (i) by a vote of a majority of
those trustees of the Trust who are not parties to this Agreement or
interested persons of any such party ("Independent Trustees"), cast
in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of the Portfolio's
outstanding voting securities; unless UBS Global Americas has
authority to enter into this Agreement pursuant to exemptive relief
from the SEC without a vote of the Portfolio's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this
Agreement shall continue in effect for one hundred and fifty (150)
days from its effective date.
(c) Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty, by vote
of the Board or by a vote of a majority of the outstanding voting
securities of the Portfolio on 10 days' written notice to the Sub-
Adviser. This Agreement may also be terminated, without the payment
of any penalty, by UBS Global Americas: (i) upon 120 days' written
notice to the Sub-Adviser; (ii) upon material breach by the Sub-
Adviser of any of the representations, warranties and agreements set
forth in Paragraph 7 of this Agreement; or (iii) immediately if, in
the reasonable judgment of UBS Global Americas, the Sub-Adviser
becomes unable to discharge its duties and obligations under this
Agreement, including circumstances such as financial insolvency of
the Sub-Adviser or other circumstances that could adversely affect
the Portfolio. The Sub-Adviser may terminate this Agreement at any
time, without the payment of any penalty, on 120 days' written notice
to UBS Global Americas. This Agreement will terminate automatically
in the event of its assignment or upon termination of the Management
Agreement, as it related to this Portfolio.
10. AMENDMENT OF THIS AGREEMENT. No provision of this
Agreement may be changed, waived, discharged or terminated orally,
but only by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is
sought. To the extent required by applicable law, no amendment of
this Agreement shall be effective until approved (i) by a vote of a
majority of the Independent Trustees, and (ii) if the terms of this
Agreement shall have changed, by a vote of a majority of the
Portfolio's outstanding voting securities (except in the case of
(ii), pursuant to the terms and conditions of the SEC order
permitting it to modify the Agreement without such vote).
11. GOVERNING LAW. This Agreement shall be construed in
accordance with the 1940 Act and the laws of the State of New York,
without giving effect to the conflicts of laws principles thereof. To
the extent that the applicable laws of the State of New York conflict
with the applicable provisions of the 1940 Act, the latter shall
control.
12. MISCELLANEOUS. The captions in this Agreement are
included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their
construction or effect. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"affiliated person," "interested person," "assignment," "broker,"
"investment adviser," "net assets," "sale," "sell" and "security"
shall have the same meanings as such terms have in the 1940 Act,
subject to such exemption as may be granted by the SEC by any rule,
regulation or order. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Agreement is made
less restrictive by a rule, regulation or order of the SEC, whether
of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order. This
Agreement may be signed in counterpart.
13. NOTICES. Any notice herein required is to be in writing
and is deemed to have been given to the Sub-Adviser or UBS Global
Americas upon receipt of the same at their respective addresses set
forth below. All written notices required or permitted to be given
under this Agreement will be delivered by personal service, by
postage mail return receipt requested or by facsimile machine or a
similar means of same delivery which provides evidence of receipt
(with a confirming copy by mail as set forth herein).
All notices provided to UBS Global Americas will be sent to
the attention of:
General Counsel
UBS Global Asset Management (Americas) Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
All notices provided to the Sub-Adviser will be sent to the
attention of:
Mondrian Investment Partners Limited
5th Floor
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Tel: 000-00-000-000-0000
Fax: 000-00-000-000-0000
Attn: Xxxxx X. Xxxxxx
with a copy to:
Mondrian Investment Partners (U.S.), Inc.
Two Commerce Square
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Tel: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx, III
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their duly authorized signatories as of
the date and year first above written.
UBS GLOBAL ASSET MANAGEMENT (AMERICAS) INC.
0 Xxxxx Xxxxxx Xxxxx
Xxxxxx: Xxxxxxx, Xxxxxxxx 00000
By:/s/Xxxx Xxxxxxx By:/s/Xxxxxx X. Xxxxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Director Title: Executive Director
MONDRIAN INVESTMENT PARTNERS LIMITED
5th Floor
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attest:
By: /s/Xxxxx Xxxxxx By: /s/Xxxxx Xxx
Name: Xxxxx Xxxxxx Name: Xxxxx Xxx
Title: Personal Assistant Title: Deputy Chief Executive Officer
For period ending July 31, 2011 Exhibit 77(Q1)
File number 811-8764
SUB-ADVISORY AGREEMENT
Agreement made as of July 20, 2011 between UBS GLOBAL ASSET
MANAGEMENT
(AMERICAS) INC. ("UBS Global Americas"), a Delaware corporation, and
MONDRIAN INVESTMENT PARTNERS LIMITED ("Sub-Adviser"), a limited
company organized under the laws of the United Kingdom (the
"Agreement").
RECITALS
(1) UBS Global Americas has entered into a Management
Agreement dated as of August 1, 2008 ("Management Agreement") with
PACE Select Advisors Trust, an open-end management investment company
registered under the Investment Company Act of 1940, as amended
("1940 Act"), with respect to PACE International Equity Investments
("Portfolio");
(2) UBS Global Americas desires to continue to retain the
Sub-Adviser (formerly known as Delaware International Advisers Ltd.)
to furnish certain investment advisory services to UBS Global
Americas and the Portfolio or a designated portion of the assets
("Segment") of the Portfolio; and
(3) The Sub-Adviser is willing to continue to furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, UBS Global Americas and the Sub-Adviser
agree as follows:
1. APPOINTMENT. UBS Global Americas hereby appoints the Sub-
Adviser as an investment sub-adviser with respect to the Portfolio or
Segment for the period and on the terms set forth in this Agreement.
The Sub-Adviser accepts that appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. DUTIES AS SUB-ADVISER.
(a) Subject to the supervision and direction of the Trust's
Board of Trustees (the "Board") and review by UBS Global Americas,
and any written guidelines adopted by the Board or UBS Global
Americas, the Sub-Adviser will provide a continuous investment
program for the Portfolio or Segment, including investment research
and discretionary management with respect to all securities and
investments and cash equivalents in the Portfolio or Segment. The
Sub-Adviser will determine from time to time what investments will be
purchased, retained or sold by the Portfolio or Segment. The Sub-
Adviser will be responsible for placing purchase and sell orders for
investments and for other related transactions for the Portfolio or
Segment. The Sub-Adviser understands that the Portfolio's assets need
to be managed so as to permit the Portfolio to qualify or to continue
to qualify as a regulated investment company under Subchapter M of
the Internal Revenue Code, as amended ("Code"). The Sub-Adviser will
provide services under this Agreement in accordance with the
Portfolio's investment objective, policies and restrictions as stated
in the Trust's currently effective registration statement under the
1940 Act, and any amendments or supplements thereto ("Registration
Statement").
(b) The Sub-Adviser agrees that it will not consult with any
other sub-adviser ("Other Sub-Adviser") for the Trust or Portfolio
concerning any transaction by the Portfolio or Segment in securities
or other assets, including (i) the purchase by the Portfolio or
Segment of a security issued by the Other Sub-Adviser, or an
affiliate of the Other Sub-Adviser, to the Trust or Portfolio except
as permitted by the 1940 Act or (ii) transactions by the Portfolio or
Segment in any security for which the Other Sub-Adviser, or its
affiliate, is the principal underwriter.
(c) The Sub-Adviser agrees that it will be responsible for
voting proxies of issuers of securities held by the Portfolio or
Segment. The Sub-Adviser further agrees that it will adopt written
proxy voting procedures that shall comply with the requirements of
the 1940 Act and the Investment Advisers Act of 1940, as amended
("Advisers Act"), and that shall be acceptable to the Board. The Sub-
Adviser further agrees that it will provide the Board on or before
August 1st of each year, or more frequently as the Board may
reasonably request, with a written report of the proxies voted during
the most recent 12-month period ending June 30, or such other period
as the Board may designate, in a format that shall comply with the
1940 Act and that shall be acceptable to the Board.
(d) The Sub-Adviser agrees that, in placing orders with
brokers, it will seek to obtain the best net result in terms of price
and execution; provided that, on behalf of the Portfolio or Segment,
the Sub-Adviser may, in its discretion, use brokers that provide the
Sub-Adviser with research, analysis, advice and similar services to
execute portfolio transactions on behalf of the Portfolio or Segment,
and the Sub-Adviser may pay to those brokers in return for brokerage
and research services a higher commission than may be charged by
other brokers, subject to the Sub-Adviser's determination in good
faith that such commission is reasonable in terms either of the
particular transaction or of the overall responsibility of the Sub-
Adviser to the Portfolio or Segment and its other clients and that
the total commissions paid by the Portfolio or Segment will be
reasonable in relation to the benefits to the Portfolio or Segment
over the long term. In no instance will portfolio securities be
purchased from or sold to UBS Global Americas or the Sub-Adviser, or
any affiliated person thereof, except in accordance with the federal
securities laws and the rules and regulations thereunder. The Sub-
Adviser may aggregate sales and purchase orders with respect to the
assets of the Portfolio or Segment with similar orders being made
simultaneously for other accounts advised by the Sub-Adviser or its
affiliates. Whenever the Sub-Adviser simultaneously places orders to
purchase or sell the same security on behalf of the Portfolio or
Segment and one or more other accounts advised by the Sub-Adviser,
the orders will be allocated as to price and amount among all such
accounts in a manner believed to be equitable over time to each
account. UBS Global Americas recognizes that in some cases this
procedure may adversely affect the results obtained for the Portfolio
or Segment.
Subject to the Sub-Adviser's obligations to seek best
execution, UBS Global Americas agrees that the Sub-Adviser, in its
sole discretion, may place transactions on behalf of the Portfolio or
Segment and the Trust with any broker-dealer deemed to be an
affiliate of the Sub-Adviser (the "Affiliated Broker-Dealers") so
long as such transactions are effected in conformity with the
requirements (including any applicable exemptions and administrative
interpretations set forth in Part II of the Sub-Adviser's Form ADV
Registration Statement on file with the Securities and Exchange
Commission ("Form ADV")) of Section 11(a)(1)(H) of the Securities
Exchange Act of 1934. In all such dealings, the Affiliated Broker-
Dealers shall be authorized and entitled to retain any commissions,
remuneration or profits which may be made in such transactions and
shall not be liable to account for the same to UBS Global Americas,
the Series or the Trust.
UBS Global Americas further authorizes the Sub-Adviser and
its Affiliated Broker-Dealers to execute agency cross transactions
(the "Cross Transactions") on behalf of the Series and the Trust.
Cross Transactions are transactions which may be effected by the
Affiliated Broker-Dealers acting for both the Series or the Trust and
the counterparty to the transaction. Cross Transactions enable the
Sub-Adviser to purchase or sell a block of securities for the Series
or the Trust at a set price and possibly avoid an unfavorable price
movement that may be created through entrance into the market with
such purchase or sale order. As such, the Sub-Adviser believes that
Cross Transactions can provide meaningful benefits for the Series and
the Trust and its clients generally. UBS Global Americas, the Series
and the Trust should be aware, however, that in a Cross Transaction
an Affiliated Broker-Dealer will be receiving commissions from both
sides of the trade and, therefore, there is a potentially conflicting
division of loyalties and responsibilities.
(e) The Sub-Adviser will maintain all books and records
required to be maintained pursuant to Rule 31 a-1 (b)(2)(ii), (3),
(5), (6), (7), (9) and (10) under the 1940 Act and the rules and
regulations promulgated thereunder with respect to transactions by
the Sub-Adviser on behalf of the Portfolio or Segment, and will
furnish the Board and UBS Global Americas with such periodic and
special reports as the Board or UBS Global Americas reasonably may
request. In compliance with the requirements of Rule 31 a-3 under the
1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Portfolio or Segment are the property of the Trust,
agrees to preserve for the periods prescribed by Rule 31 a-2 under
the 1940 Act any records that it maintains for the Portfolio or
Segment and that are required to be maintained by Rule 31a-1 under
the 1940 Act, and further agrees to surrender promptly to the Trust
any records which it maintains for the Portfolio or Segment upon
request by the Trust.
(f) At such times as shall be reasonably requested by the
Board or UBS Global Americas, the Sub-Adviser will provide the Board
and UBS Global Americas with economic and investment analyses and
reports as well as quarterly reports setting forth the performance of
the Portfolio or Segment and make available to the Board and UBS
Global Americas any economic, statistical and investment services
that the Sub-Adviser normally makes available to its institutional or
other customers.
(g) In accordance with procedures adopted by the Board, as
amended from time to time, the Sub-Adviser is responsible for
assisting in the fair valuation of all portfolio securities in the
Portfolio or Segment and will use its reasonable efforts to arrange
for the provision of a price or prices from one or more parties
independent of the Sub-Adviser for each portfolio security for which
the custodian does not obtain prices in the ordinary course of
business from an automated pricing service.
3. FURTHER DUTIES. In all matters relating to the performance
of this Agreement, the Sub-Adviser will seek to act in conformity
with the Trust's Trust Instrument, By-Laws and Registration Statement
and with the written instructions and written directions of the Board
and UBS Global Americas; and will comply with the requirements of the
1940 Act, and the Advisers Act, and the rules under each, the Code,
and all other federal and state laws and regulations applicable to
the Trust and the Portfolio. UBS Global Americas agrees to provide to
the Sub-Adviser copies of the Trust's Trust Instrument, By-Laws,
Registration Statement, written instructions and directions of the
Board and UBS Global Americas, and any amendments or supplements to
any of these materials as soon as practicable after such materials
become available; and further agrees to identify to the Sub-Adviser
in writing any broker-dealers that are affiliated with UBS Global
Americas (other than UBS Financial Services Inc.).
4. EXPENSES. During the term of this Agreement, the Sub-
Adviser will bear all expenses incurred by it in connection with its
services under this Agreement. The Sub-Adviser shall not be
responsible for any expenses incurred by the Trust, the Portfolio or
UBS Global Americas.
5. COMPENSATION.
(a) For the services provided and the expenses assumed by the
Sub-Adviser pursuant to this Agreement, UBS Global Americas, not the
Portfolio, will pay to the Sub-Adviser a fee, computed daily and
payable monthly at the annual rates set forth below based on the
average daily net assets of the Portfolio or Segment allocated to the
Sub-Adviser's management:
PORTFOLIO OR SEGMENT ASSETS SUB-ADVISORY FEE AS A
MANAGED BY SUB-ADVISER PERCENTAGE OF AVERAGE DAILY NET ASSETS
--------------------------------- --------------------------------------
First $150 million 0.35%
Amounts in excess of $150 million 0.30%
(b) UBS Global Americas will compute the fees payable to the
Sub-Adviser in the manner specified in the Management Agreement and
will provide the Sub-Adviser with a schedule showing the manner in
which the fee was computed. If the Sub-Adviser is managing a Segment,
its fees will be based on the value of the assets of the Portfolio
within the Sub-Adviser's Segment.
(c) The fee shall be accrued daily and payable monthly to the
Sub-Adviser on or before the last business day of the next succeeding
calendar month.
(d) If this Agreement becomes effective or terminates before
the end of any month, the fee for the period from the effective date
to the end of the month or from the beginning of such month to the
date of termination, as the case may be, shall be pro-rated according
to the proportion which such period bears to the full month in that
such effectiveness or termination occurs.
6. LIMITATION OF LIABILITY.
(a) The Sub-Adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Portfolio,
the Trust or its shareholders or by UBS Global Americas in connection
with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement.
(b) In no event will the Sub-Adviser have any responsibility
for any other portfolio of the Trust, for any portion of the
Portfolio not managed by the Sub-Adviser or for the acts or omissions
of any Other Sub-Adviser to the Trust or Portfolio.
In particular, in the event the Sub-Adviser shall manage only
a Segment of the Portfolio, the Sub-Adviser shall have no
responsibility for the Portfolio's being in violation of any
applicable law or regulation or investment policy or restriction
applicable to the Portfolio as a whole or for the Portfolio's failing
to qualify as a regulated investment company under the Code, if the
securities and other holdings of the Segment of the Portfolio managed
by the Sub-Adviser are such that such Segment would not be in such
violation or fail to so qualify if such Segment were deemed a
separate series of the Trust or a separate "regulated investment
company" under the Code.
Nothing in this section shall be deemed a limitation or
waiver of any obligation or duty that may not by law be limited or
waived.
7. REPRESENTATIONS OF SUB-ADVISER. The Sub-Adviser
represents, warrants and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment
adviser under the Advisers Act and will continue to be so registered
for so long as this Agreement remains in effect; (ii) is not
prohibited by the 1940 Act or the Advisers Act from performing the
services contemplated by this Agreement; (iii) has met, and will seek
to continue to meet for so long as this Agreement remains in effect,
any other applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency,
necessary to be met in order to perform the services contemplated by
this Agreement; (iv) has the authority to enter into and perform the
services contemplated by this Agreement; and (v) will promptly notify
UBS Global Americas of the occurrence of any event that would
disqualify the Sub-Adviser from serving as an investment adviser of
an investment company pursuant to Section 9(a) of the 1940 Act or
otherwise.
(b) The Sub-Adviser has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act and
will provide UBS Global Americas and the Board with a copy of such
code of ethics, together with evidence of its adoption. Within
fifteen days of the end of the last calendar quarter of each year
that this Agreement is in effect, a duly authorized officer of the
Sub-Adviser shall certify to UBS Global Americas that the Sub-Adviser
has complied with the requirements of Rule 17j-1 during the previous
year and that there has been no material violation of the Sub-
Adviser's code of ethics or, if such a violation has occurred, that
appropriate action was taken in response to such violation. Upon the
written request of UBS Global Americas, the Sub-Adviser shall permit
UBS Global Americas, its employees or its agents to examine the
reports required to be made by the Sub-Adviser pursuant to Rule 17j-1
and all other records relevant to the Sub-Adviser's code of ethics.
(c) The Sub-Adviser has provided UBS Global Americas with a
copy of its Form ADV, as most recently filed with the Securities and
Exchange Commission ("SEC"), and promptly will furnish a copy of all
amendments to UBS Global Americas at least annually. In addition, the
Sub-Adviser has provided UBS Global Americas with certain disclosures
required by the U.K. Financial Services Authority.
(d) The Sub-Adviser will notify UBS Global Americas of any
change of control of the Sub-Adviser, including any change of its
general partners or 25% shareholders or 25% limited partners, as
applicable, and any changes in the key personnel who are either the
portfolio manager(s) of the Portfolio or senior management of the
Sub-Adviser, in each case prior to or promptly after such change.
(e) UBS Global Americas and the Sub-Adviser agree that
neither of them nor any of their affiliates, will in any way refer
directly or indirectly to their relationship with one another or any
of their respective affiliates in offering, marketing or other
promotional materials without the express written consent of the
other, which consent will be promptly provided and not unreasonably
withheld.
8. SERVICES NOT EXCLUSIVE. The services furnished by the Sub-
Adviser hereunder are not to be deemed exclusive, and except as the
Sub-Adviser may otherwise agree in writing, the Sub-Adviser shall be
free to furnish similar services to others so long as its services
under this Agreement are not impaired thereby. Nothing in this
Agreement shall limit or restrict the right of any director, officer
or employee of the Sub-Adviser, who may also be a trustee, officer or
employee of the Trust, to engage in any other business or to devote
his or her time and attention in part to the management or other
aspects of any other business, whether of a similar nature or a
dissimilar nature.
9. DURATION AND TERMINATION.
(a) This Agreement shall become effective upon the date first
above written, provided that this Agreement shall not take effect
unless it has first been approved (i) by a vote of a majority of
those trustees of the Trust who are not parties to this Agreement or
interested persons of any such party ("Independent Trustees"), cast
in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of the Portfolio's
outstanding voting securities, unless UBS Global Americas has
authority to enter into this Agreement pursuant to exemptive relief
from the SEC without a vote of the Portfolio's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this
Agreement shall continue in effect for two years from its effective
date. Thereafter, if not terminated, this Agreement shall continue
automatically for successive periods of twelve months each, provided
that such continuance is specifically approved at least annually (i)
by a vote of a majority of the Independent Trustees, cast in person
at a meeting called for the purpose of voting on such approval, and
(ii) by the Board or by vote of a majority of the outstanding voting
securities of the Portfolio.
(c) Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty, by vote
of the Board or by a vote of a majority of the outstanding voting
securities of the Portfolio on 30 days' written notice to the Sub-
Adviser. This Agreement may also be terminated, without the payment
of any penalty, by UBS Global Americas: (i) upon 120 days' written
notice to the Sub-Adviser; (ii) upon material breach by the Sub-
Adviser of any of the representations, warranties and agreements set
forth in Paragraph 7 of this Agreement; or (iii) immediately if, in
the reasonable judgment of UBS Global Americas, the Sub-Adviser
becomes unable to discharge its duties and obligations under this
Agreement, including circumstances such as financial insolvency of
the Sub-Adviser or other circumstances that could adversely affect
the Portfolio. The Sub-Adviser may terminate this Agreement at any
time, without the payment of any penalty, on 120 days' written notice
to UBS Global Americas. This Agreement will terminate automatically
in the event of its assignment or upon termination of the Management
Agreement, as it relates to this Portfolio.
10. AMENDMENT OF THIS AGREEMENT. No provision of this
Agreement may be changed, waived, discharged or terminated orally,
but only by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is
sought. To the extent required by applicable law, no amendment of
this Agreement shall be effective until approved (i) by a vote of a
majority of the Independent Trustees, and (ii) if the terms of this
Agreement shall have changed, by a vote of a majority of the
Portfolio's outstanding voting securities (except in the case of
(ii), pursuant to the terms and conditions of the SEC order
permitting it to modify the Agreement without such vote).
11. GOVERNING LAW. This Agreement shall be construed in
accordance with the 1940 Act and the laws of the State of New York,
without giving effect to the conflicts of laws principles thereof. To
the extent that the applicable laws of the State of New York conflict
with the applicable provisions of the 1940 Act, the latter shall
control.
12. MISCELLANEOUS. The captions in this Agreement are
included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their
construction or effect. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"affiliated person," "interested person," "assignment," "broker,"
"investment adviser," "net assets," "sale," "sell" and "security"
shall have the same meanings as such terms have in the 1940 Act,
subject to such exemption as may be granted by the SEC by any rule,
regulation or order. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Agreement is made
less restrictive by a rule, regulation or order of the SEC, whether
of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order. This
Agreement may be signed in counterpart.
13. NOTICES. Any notice herein required is to be in writing
and is deemed to have been given to the Sub-Adviser or UBS Global
Americas upon receipt of the same at their respective addresses set
forth below. All written notices required or permitted to be given
under this Agreement will be delivered by personal service, by
postage mail return receipt requested or by facsimile machine or a
similar means of same delivery which provides evidence of receipt
(with a confirming copy by mail as set forth herein).
All notices provided to UBS Global Americas will be sent to
the attention of:
General Counsel
UBS Global Asset Management (Americas) Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
All notices provided to the Sub-Adviser will be sent to the attention of:
Mondrian Investment Partners Limited
5th Floor
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X0XX
Xxxxxx Xxxxxxx
Tel: 000-00-000-000-0000
Fax: 000-00-000-000-0000
Attn: Xxxxx X. Xxxxxx
with a copy to:
Mondrian Investment Partners (U.S.), Inc.
Two Commerce Square
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Tel: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx, III
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their duly authorized signatories as of
the date and year first above written.
UBS Global Asset Management (Americas) Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxxxxx: Xxx Xxxx, XX 00000
By:/s/Xxxx Xxxxxxx By:/s/Xxxxxx X. Xxxxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Director Title: Executive Director
Mondrian Investment Partners Limited
5th Floor
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attest:
By:/s/Xxxx Xxxxxxx By:/s/Xxxxx Xxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxx Xxxxxx
Title: Legal & Compliance Assistant Title: Executive Chairman
For period ending July 31, 2011 Exhibit 77(Q1)
File number 811-8764
SUB-ADVISORY AGREEMENT
Agreement made as of July 20, 2011 between UBS GLOBAL ASSET
MANAGEMENT (AMERICAS) INC., a Delaware corporation ("UBS Global
Americas"), and MONDRIAN INVESTMENT PARTNERS LIMITED ("Sub-Adviser"),
a limited company organized under the laws of the United Kingdom (the
"Agreement").
RECITALS
(1) UBS Global Americas has entered into a Management
Agreement dated as of August 1, 2008 ("Management Agreement") with
PACE Select Advisors Trust, an open-end management investment company
registered under the Investment Company Act of 1940, as amended
("1940 Act"), with respect to PACE International Emerging Markets
Equity Investments ("Portfolio");
(2) UBS Global Americas desires to continue to retain the
Sub-Adviser to furnish certain investment advisory services to UBS
Global Americas and the Portfolio or a designated portion of the
assets ("Segment") of the Portfolio; and
(3) The Sub-Adviser is willing to continue to furnish such
services;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, UBS Global Americas and the Sub-Adviser
agree as follows:
1. APPOINTMENT. UBS Global Americas hereby appoints the Sub-
Adviser as an investment Sub-Adviser with respect to the Portfolio or
Segment for the period and on the terms set forth in this Agreement.
The Sub-Adviser accepts that appointment and agrees to render the
services herein set forth, for the compensation herein provided.
2. DUTIES AS SUB-ADVISER.
(a) Subject to the supervision and direction of the Trust's
Board of Trustees (the "Board") and review by UBS Global Americas,
and any written guidelines adopted by the Board or UBS Global
Americas, the Sub-Adviser will provide a continuous investment
program for the Portfolio or Segment, all or a designated portion of
the assets, including investment research and discretionary
management with respect to all securities and investments and cash
equivalents in the Portfolio or Segment. The Sub-Adviser will
determine from time to time what investments will be purchased,
retained or sold by the Portfolio or Segment. The Sub-Adviser will be
responsible for placing purchase and sell orders for investments and
for other related transactions for the Portfolio or Segment. The Sub-
Adviser understands that the Portfolio's assets need to be managed so
as to permit the Portfolio to qualify or to continue to qualify as a
regulated investment company under Subchapter M of the Internal
Revenue Code, as amended ("Code"). The Sub-Adviser will provide
services under this Agreement in accordance with the Portfolio's
investment objective, policies and restrictions as stated in the
Trust's currently effective registration statement under the 1940
Act, and any amendments or supplements thereto ("Registration
Statement").
(b) The Sub-Adviser agrees that it will not consult with any
other Sub-Adviser ("Other Sub-Adviser") for the Trust or Portfolio
concerning any transaction by the Portfolio or Segment in securities
or other assets, including (i) the purchase by the Portfolio or
Segment of a security issued by the Other Sub-Adviser, or an
affiliate of the Other Sub-Adviser, to the Trust or Portfolio except
as permitted by the 1940 Act or (ii) transactions by the Portfolio or
Segment in any security for which the Other Sub-Adviser, or its
affiliate, is the principal underwriter.
(c) The Sub-Adviser agrees that it will be responsible for
voting proxies of issuers of securities held by the Portfolio or
Segment. The Sub-Adviser further agrees that it will adopt written
proxy voting procedures that shall comply with the requirements of
the 1940 Act and the Investment Advisers Act of 1940, as amended
("Advisers Act"), and that shall be acceptable to the Board. The
Sub-Adviser further agrees that it will provide the Board on or
before August 1st of each year, or more frequently as the Board may
reasonably request, with a written report of the proxies voted during
the most recent 12-month period ending June 30, or such other period
as the Board may designate, in a format that shall comply with the
1940 Act and that shall be acceptable to the
Board.
(d) The Sub-Adviser agrees that, in placing orders with
brokers, it will obtain the best net result in terms of price and
execution. The Sub-Adviser may aggregate sales and purchase orders
with respect to the assets of the Portfolio or Segment with similar
orders being made simultaneously for other accounts advised by the
Sub-Adviser or its affiliates. Whenever the Sub-Adviser
simultaneously places orders to purchase or sell the same security on
behalf of the Portfolio or Segment and one or more other accounts
advised by the Sub-Adviser, the orders will be allocated as to price
and amount among all such accounts in a manner believed to be
equitable over time to each account. UBS Global Americas recognizes
that in some cases this procedure may adversely affect the results
obtained for the Portfolio or Segment.
Subject to the Sub-Adviser's obligations to seek best
execution, UBS Global Americas agrees that the Sub-Adviser, in its
sole discretion, may place transactions on behalf of the Portfolio or
Segment and the Trust with any broker-dealer deemed to be an
affiliate of the Sub-Adviser (the "Affiliated Broker-Dealers") so
long as such transactions are effected in conformity with the
requirements (including any applicable exemptions and administrative
interpretations set forth in Part II of the Sub-Adviser's Form ADV
Registration Statement on file with the Securities and Exchange
Commission ("Form ADV")) of Section 11(a)(1)(H) of the Securities
Exchange Act of 1934. In all such dealings, the Affiliated Broker-
Dealers shall be authorized and entitled to retain any commissions,
remuneration or profits which may be made in such transactions and
shall not be liable to account for the same to UBS Global Americas,
the Portfolio or the Trust.
UBS Global Americas further authorizes the Sub-Adviser and
its Affiliated Broker-Dealers to execute agency cross transactions
(the "Cross Transactions") on behalf of the Portfolio and the Trust.
Cross Transactions are transactions which may be effected by the
Affiliated Broker-Dealers acting for both the Portfolio or the Trust
and the counterparty to the transaction. Cross Transactions enable
the Sub-Adviser to purchase or sell a block of securities for the
Portfolio or the Trust at a set price and possibly avoid an
unfavorable price movement that may be created through entrance into
the market with such purchase or sale order. As such, the Sub-Adviser
believes that Cross Transactions can provide meaningful benefits for
the Portfolio and the Trust and its clients generally. UBS Global
Americas, the Portfolio and the Trust should be aware, however, that
in a Cross Transaction an Affiliated Broker-Dealer will be receiving
commissions from both sides of the trade and, therefore, there is a
potentially conflicting division of loyalties and responsibilities.
(e) The Sub-Adviser will maintain all books and records
required to be maintained pursuant to Rule 31a-1(b)(2)(ii)(3), (5),
(6), (7), (9) and (10) under the 1940 Act and the rules and
regulations promulgated thereunder with respect to transactions by
the Sub-Adviser on behalf of the Portfolio or Segment, and will
furnish the Board and UBS Global Americas with such periodic and
special reports as the Board or UBS Global Americas reasonably may
request. In compliance with the requirements of Rule 31a-3 under the
1940 Act, the Sub-Adviser hereby agrees that all records which it
maintains for the Portfolio or Segment are the property of the Trust,
agrees to preserve for the periods prescribed by Rule 31 a-2 under
the 1940 Act any records which it maintains for the Portfolio or
Segment and which are required to be maintained by Rule 31a-1 under
the 1940 Act, and further agrees to surrender promptly to the Trust
any records which it maintains for the Portfolio or Segment upon
request by the Trust.
(f) At such times as shall be reasonably requested by the
Board or UBS Global Americas, the Sub-Adviser will provide the Board
and UBS Global Americas with economic and investment analyses and
reports as well as quarterly reports setting forth the performance of
the Portfolio or Segment and make available to the Board and UBS
Global Americas any economic, statistical and investment services
that the Sub-Adviser normally makes available to its institutional or
other customers.
(g) In accordance with procedures adopted by the Board, as
amended from time to time, the Sub-Adviser is responsible for
assisting in the fair valuation of all portfolio securities in the
Portfolio or Segment and will use its reasonable efforts to arrange
for the provision of a price or prices from one or more parties
independent of the Sub-Adviser for each portfolio security for which
the custodian does not obtain prices in the ordinary course of
business from an automated pricing service.
3. FURTHER DUTIES. In all matters relating to the performance
of this Agreement, the Sub-Adviser will seek to act in conformity
with the Trust's Trust Instrument, By-Laws and Registration Statement
and with the written instructions and written directions of the Board
and UBS Global Americas and will comply with the applicable
requirements of the 1940 Act, the Advisers Act, and the rules under
each, the Code, and all other federal and state laws and regulations
applicable to the Trust and the Portfolio. UBS Global Americas agrees
to provide to the Sub-Adviser copies of the Trust's Trust Instrument,
By-Laws, Registration Statement, written instructions and directions
of the Board and UBS Global Americas, and any amendments or
supplements to any of these materials as soon as practicable after
such materials become available; provided, however, that the Sub-
Adviser's duty under this Agreement to act in conformity with any
document, instruction or guideline produced by the Trust or UBS
Global Americas shall not arise until it has been delivered to the
Sub-Adviser. Any changes to the objectives, policies and restrictions
will make due allowance for the time within which the Sub-Adviser
shall have to come into compliance. UBS Global Americas further
agrees to identify to the Sub-Adviser in writing any broker-dealers
that are affiliated with UBS Global Americas (other than UBS
Financial Services Inc.).
4. EXPENSES. During the term of this Agreement, the Sub-
Adviser will bear all expenses incurred by it in connection with its
services under this Agreement. The Sub-Adviser shall not be
responsible for any expenses incurred by the Trust, the Portfolio or
UBS Global Americas.
5. COMPENSATION.
(a) For the services provided and the expenses assumed by the
Sub-Adviser pursuant to this Agreement, UBS Global Americas, not the
Portfolio, will pay to the Sub-Adviser a fee, computed daily and
payable monthly, at an annual rate of 0.65% up to $150 million, 0.55%
next $100 million and 0.50% on assets in excess of $250 million of
the average daily net assets of the Portfolio or Segment (computed in
the manner specified in the Management Agreement), and will provide
the Sub-Adviser with a schedule showing the manner in which the fee
was computed. If the Sub-Adviser is managing a Segment, its fees will
be based on the value of the assets of the Portfolio within the Sub-
Adviser's Segment.
(b) The fee shall be accrued daily and payable monthly to the
Sub-Adviser on or before the last business day of the next succeeding
calendar month.
(c) For those periods in which UBS Global Americas has agreed
to waive all or a portion of its management fee, UBS Global Americas
may ask the. Sub-Adviser to waive the same proportion of its fees,
but the Sub-Adviser is under no obligation to do so.
(d) If this Agreement becomes effective or terminates before
the end of any month, the fee for the period from the effective date
to the end of the month or from the beginning of such month to the
date of termination, as the case may be, shall be pro-rated according
to the proportion which such period bears to the full month in that
such effectiveness or termination occurs.
6. LIMITATION OF LIABILITY.
(a) The Sub-Adviser shall not be liable for any error of
judgment or mistake of law or for any loss suffered by the Portfolio,
the Trust or its shareholders or by UBS Global Americas in connection
with the matters to which this Agreement relates, except a loss
resulting from willful misfeasance, bad faith or gross negligence on
its part in the performance of its duties or from reckless disregard
by it of its obligations and duties under this Agreement.
(b) In no event will the Sub-Adviser have any responsibility
for any other portfolio of the Trust, for any portion of the
Portfolio not managed by the Sub-Adviser or for the acts or omissions
of any Other Sub-Adviser to the Trust or Portfolio.
In particular, in the event the Sub-Adviser shall manage only
a portion of the Portfolio's Segment of the Portfolio, the Sub-
Adviser shall have no responsibility for the Portfolio's being in
violation of any applicable law or regulation or investment policy or
restriction applicable to the Portfolio as a whole or for the
Portfolio's failing to qualify as a regulated investment company
under the Code, if the securities and other holdings of the Segment
of the Portfolio managed by the Sub-Adviser are such that such
Segment would not be in such violation or fail to so qualify if such
Segment were deemed a separate series of the Trust or a separate
"regulated investment company" under the Code.
7. REPRESENTATIONS OF SUB-ADVISER. The Sub-Adviser
represents, warrants and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment
adviser under the Advisers Act and will continue to be so registered
for so long as this Agreement remains in effect; (ii) is not
prohibited by the 1940 Act or the Advisers Act from performing the
services contemplated by this Agreement; (iii) has met, and will seek
to continue to meet for so long as this Agreement remains in effect,
any other applicable federal or state requirements, or the applicable
requirements of any regulatory or industry self-regulatory agency,
necessary to be met in order to perform the services contemplated by
this Agreement; (iv) has the authority to enter into and perform the
services contemplated by this
Agreement; and (v) will promptly notify UBS Global Americas of the
occurrence of any event that would disqualify the Sub-Adviser from
serving as an investment adviser of an investment company pursuant to
Section 9(a) of the 1940 Act or otherwise.
(b) The Sub-Adviser has adopted a written code of ethics
complying with the requirements of Rule 17j-1 under the 1940 Act and
will provide UBS Global Americas and the Board with a copy of such
code of ethics, together with evidence of its adoption. Within
fifteen days of the end of the last calendar quarter of each year
that this Agreement is in effect, a duly authorized officer of the
Sub-Adviser shall certify to UBS Global Americas that the Sub-Adviser
has complied with the requirements of Rule 17j-1 during the previous
year and that there has been no violation of the Sub-Adviser's code
of ethics or, if such a violation has occurred, that appropriate
action was taken in response to such violation. Upon the written
request of UBS Global Americas, the Sub-Adviser shall permit UBS
Global Americas, its employees or its agents to examine the reports
required to be made by the Sub-Adviser pursuant to Rule 17j-1(c)(1)
and all other records relevant to the Sub-Adviser's code of ethics.
(c) The Sub-Adviser has provided UBS Global Americas with a
copy of its Form ADV as most recently filed with the Securities and
Exchange Commission ("SEC") and promptly will furnish a copy of all
amendments to UBS Global Americas at least annually.
(d) The Sub-Adviser will notify UBS Global Americas of any
change of control of the Sub-Adviser, including any change of its
general partners or 25% shareholders or 25% limited partners, as
applicable, and any changes in the key personnel who are either the
portfolio manager(s) of the Portfolio or senior management of the
Sub-Adviser, in each case prior to or promptly after such change.
(e) UBS Global Americas and the Sub-Adviser agree that
neither of them nor any of their affiliates, will in any way refer
directly or indirectly to their relationship with one another or any
of their respective affiliates in offering, marketing or other
promotional materials without the express written consent of the
other, which consent will be promptly provided and not unreasonably
withheld.
8. SERVICES NOT EXCLUSIVE. The services furnished by the Sub-
Adviser hereunder are not to be deemed exclusive, and except as the
Sub-Adviser may otherwise agree in writing, the Sub-Adviser shall be
free to furnish similar services to others so long as its services
under this Agreement are not impaired thereby. Nothing in this
Agreement shall limit or restrict the right of any director, officer
or employee of the Sub-Adviser, who may also be a trustee, officer or
employee of the Trust, to engage in any other business or to devote
his or her time and attention in part to the management or other
aspects of any other business, whether of a similar nature or a
dissimilar nature.
9. DURATION AND TERMINATION.
(a) This Agreement shall become effective upon the date first
above written, provided that this Agreement shall not take effect
unless it has first been approved (i) by a vote of a majority of
those trustees of the Trust who are not parties to this Agreement or
interested persons of any such party ("Independent Trustees"), cast
in person at a meeting called for the purpose of voting on such
approval, and (ii) by vote of a majority of the Portfolio's
outstanding voting securities; unless UBS Global Americas has
authority to enter into this Agreement pursuant to exemptive relief
from the SEC without a vote of the Portfolio's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this
Agreement shall continue in effect for two years from its effective
date. Thereafter, if not terminated, this Agreement shall continue
automatically for successive periods of twelve months each, provided
that such continuance is specifically approved at least annually (i)
by a vote of a majority of the Independent Trustees, cast in person
at a meeting called for the purpose of voting on such approval, and
(ii) by the Board or by vote of a majority of the outstanding voting
securities of the Portfolio.
(c) Notwithstanding the foregoing, this Agreement may be
terminated at any time, without the payment of any penalty, by vote
of the Board or by a vote of a majority of the outstanding voting
securities of the Portfolio on 30 days' written notice to the Sub-
Adviser. This Agreement may also be terminated, without the payment
of any penalty, by UBS Global Americas: (i) upon 120 days' written
notice to the Sub-Adviser; (ii) upon material breach by the Sub-
Adviser of any of the representations, warranties and agreements set
forth in Paragraph 7 of this Agreement; or (iii) immediately if, in
the reasonable judgment of UBS Global Americas, the Sub-Adviser
becomes unable to discharge its duties and obligations under this
Agreement, including circumstances such as financial insolvency of
the Sub-Adviser or other circumstances that could adversely affect
the Portfolio. The Sub-Adviser may terminate this Agreement at any
time, without the payment of any penalty, on 120 days' written notice
to UBS Global Americas. This Agreement will terminate automatically
in the event of its assignment or upon termination of the Management
Agreement, as it related to this Portfolio.
10. AMENDMENT OF THIS AGREEMENT. No provision of this
Agreement may be changed, waived, discharged or terminated orally,
but only by an instrument in writing signed by the party against whom
enforcement of the change, waiver, discharge or termination is
sought. To the extent required by applicable law, no amendment of
this Agreement shall be effective until approved (i) by a vote of a
majority of the Independent Trustees, and (ii) if the terms of this
Agreement shall have changed, by a vote of a majority of the
Portfolio's outstanding voting securities (except in the case of
(ii), pursuant to the terms and conditions of the SEC order
permitting it to modify the Agreement without such vote).
11. GOVERNING LAW. This Agreement shall be construed in
accordance with the 1940 Act and the laws of the State of New York,
without giving effect to the conflicts of laws principles thereof. To
the extent that the applicable laws of the State of New York conflict
with the applicable provisions of the 1940 Act, the latter shall
control.
12. MISCELLANEOUS. The captions in this Agreement are
included for convenience of reference only and in no way define or
delimit any of the provisions hereof or otherwise affect their
construction or effect. If any provision of this Agreement shall be
held or made invalid by a court decision, statute, rule or otherwise,
the remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors. As used in this
Agreement, the terms "majority of the outstanding voting securities,"
"affiliated person," "interested person," "assignment," "broker,"
"investment adviser," "net assets," "sale," "sell" and "security"
shall have the same meanings as such terms have in the 1940 Act,
subject to such exemption as may be granted by the SEC by any rule,
regulation or order. Where the effect of a requirement of the federal
securities laws reflected in any provision of this Agreement is made
less restrictive by a rule, regulation or order of the SEC, whether
of special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order. This
Agreement may be signed in counterpart.
13. NOTICES. Any notice herein required is to be in writing
and is deemed to have been given to the Sub-Adviser or UBS Global
Americas upon receipt of the same at their respective addresses set
forth below. All written notices required or permitted to be given
under this Agreement will be delivered by personal service, by
postage mail return receipt requested or by facsimile machine or a
similar means of same delivery which provides evidence of receipt
(with a confirming copy by mail as set forth herein).
All notices provided to UBS Global Americas will be sent to
the attention of:
General Counsel
UBS Global Asset Management (Americas) Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000
All notices provided to the Sub-Adviser will be sent to the attention of:
Mondrian Investment Partners Limited
5th Floor
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Tel: 000-00-000-000-0000
Fax: 000-00-000-000-0000
Attn: Xxxxx X. Xxxxxx
with a copy to:
Mondrian Investment Partners (U.S.), Inc.
Two Commerce Square
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, XX 00000
Tel: (000) 000-0000
Attn: Xxxxx X. Xxxxxxx, III
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed by their duly authorized signatories as of
the date and year first above written.
UBS Global Asset Management (Americas) Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxxxxx: Xxx Xxxx, XX 00000
By:/s/Xxxx Xxxxxxx By:/s/Xxxxxx X. Xxxxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxxx X. Xxxxxxxx
Title: Director Title: Executive Director
Mondrian Investment Partners Limited
5th Floor
00 Xxxxxxx Xxxxxx
Xxxxxx XX0X 0XX
Xxxxxx Xxxxxxx
Attest:
By:/s/Xxxx Xxxxxxx By:/s/Xxxxx Xxxxxx
Name: Xxxx Xxxxxxx Name: Xxxxx Xxxxxx
Title: Legal & Compliance Assistant Title: Executive Chairman
For period ending July 31, 2011 Exhibit 77(Q1)
File number 811-8764
SUB-ADVISORY AGREEMENT
Agreement dated as of July 1, 2011 between UBS Global Asset
Management (Americas) Inc. ("UBS Global AM"), a Delaware corporation,
and CBRE Clarion Securities, LLC ("Sub- Adviser"), a Delaware limited
liability company (the "Agreement").
RECITALS
(1) UBS Global AM has entered into a Management Agreement dated as
of August 1, 2008 ("Management Agreement"), with PACE(r) Select
Advisors Trust ("Trust"), an open-end management investment company
registered under the Investment Company Act of 1940, as amended
("1940 Act"), with respect to PACE(r) Global Real Estate Securities
Investments ("Portfolio"); and
(2) UBS Global AM is authorized to retain one or more sub-advisers
to furnish certain investment advisory services to UBS Global AM and
the Portfolio;
(3) UBS Global AM desires to retain the Sub-Adviser to furnish
certain investment advisory services to UBS Global AM and the
Portfolio or a designated portion of the assets ("Segment") of the
Portfolio; and
(4) The Sub-Adviser is willing to furnish such services;
Now therefore, in consideration of the premises and mutual covenants
herein contained, UBS Global AM and the Sub-Adviser agree as follows:
1. Appointment. UBS Global AM hereby appoints the Sub-Adviser as
an investment sub-adviser with respect to the Portfolio or Segment
for the period and on the terms set forth in this Agreement. The Sub-
Adviser accepts that appointment and agrees to render the services
herein set forth, for the compensation herein provided.
2. Duties as Sub-Adviser.
(a) Subject to the supervision and direction of the Trust's Board
of Trustees (the "Board") and review by UBS Global AM, and any
written guidelines adopted by the Board or UBS Global AM the Sub-
Adviser will provide a continuous investment program for the
Portfolio or Segment, including investment research and discretionary
management with respect to all securities and investments and cash
equivalents in the Portfolio or Segment. The Sub-Adviser will
determine from time to time what investments will be purchased,
retained or sold by the Portfolio or Segment. The Sub-Adviser
will be responsible for placing purchase and sell orders for
investments and for other related transactions for the Portfolio or
Segment. The Sub-Adviser understands that the Portfolio's assets need
to be managed so as to permit the Portfolio to qualify or to continue
to qualify as a regulated investment company under Subchapter M of
the Internal Revenue Code, as amended ("Code"). The Sub-Adviser will
provide services under this Agreement in accordance with the
Portfolio's investment objective, policies and restrictions as stated
in the Trust's currently effective registration statement under the
1940 Act, and any amendments or supplements thereto ("Registration
Statement"). The Sub-Adviser, on each business day, shall provide
UBS Global AM and the Trust's custodian such information as UBS
Global AM and the Trust's custodian may reasonably request relating
to all transactions concerning the Portfolio or Segment.
UBS Global AM hereby designates and appoints the Sub-Adviser as its
and the Portfolio's limited purpose agent and attorney-in-fact,
without further prior approval of UBS Global AM (except as expressly
provided for herein or as may be required by law) to make and
execute, in the name and on behalf of the Portfolio, all agreements,
instruments and other documents and to take all such other action
which the Sub-Adviser considers necessary or advisable to carry out
its duties hereunder. By way of example and not by way of limitation,
in connection with any purchase for the Portfolio or Segment of
securities or instruments that are not registered under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), the Sub-
Adviser shall have the full power and authority, among other things,
to: (i) commit to purchase such securities for the Portfolio on the
terms and conditions under which such securities are offered; (ii)
execute such account opening and other agreements, instruments and
documents (including, without limitation, purchase agreements,
subscription documents, ISDA and other swap and derivative
documents), and make such commitments, as may be required in
connection with the purchase and sale of such securities or
instruments; (iii) represent that the Portfolio is an "accredited
investor" as defined in Rule 501 (a) of Regulation D under the
Securities Act and a "Qualified Institutional Buyer" as defined in
Rule 144A (a) (1) (i) under the Securities Act; and (iv) commit that
such securities will not be offered or sold by the Portfolio except
in compliance with the registration requirements of the Securities
Act or an exemption therefrom. This power-of-attorney is a continuing
power-of-attorney and shall remain in full force and effect until
revoked by UBS Global AM or the Trust in writing, but any such
revocation shall not affect any transaction initiated prior to
receipt by the Sub-Adviser of such notice.
(b) The Sub-Adviser agrees that it will not consult with any other
sub-adviser ("Other Sub-Adviser") for the Trust or Portfolio
concerning any transaction by the Portfolio or Segment in securities
or other assets, including (i) the purchase by the Portfolio or
Segment of a security issued by the Other Sub-Adviser, or an
affiliate of the Other Sub-Adviser, to the Trust or Portfolio except
as permitted by the 1940 Act or (ii) transactions by the Portfolio or
Segment in any security for which the Other Sub-Adviser, or its
affiliate, is the principal underwriter.
(c) Unless otherwise instructed by UBS Global AM or the Trust, the
Sub-Adviser agrees that it will be responsible for voting proxies of
issuers of securities held by the Portfolio or Segment. The Sub-
Adviser further agrees that it will adopt written proxy voting
procedures that shall comply with the requirements of the 1940 Act
and the Investment Advisers Act of 1940, as amended ("Advisers Act")
("Proxy Voting Policy"), and that shall be acceptable to the Board.
The Sub-Adviser shall also provide its Proxy Voting Policy, and if
requested by UBS Global AM, a summary of such Proxy Voting Policy for
inclusion in the Trust's registration statement, and will provide UBS
Global AM with any material amendment to the Proxy Voting Policy
within a reasonable time after such amendment has taken effect. The
Sub-Adviser further agrees that it will provide the Board on or
before August 1st of each year, or more frequently as the Board may
reasonably request, with a written report of the proxies voted during
the most recent 12-month period ending June 30, or such other period
as the Board may designate, in a format that shall comply with the
1940 Act and that shall be acceptable to the Board.
(d) The Sub-Adviser agrees that upon the request of UBS Global AM or
the Board, Sub-Adviser shall exercise the rights incident to the
securities held by the Portfolio or Segment in the context of a
bankruptcy or other reorganization. The Sub-Adviser further agrees
that it will keep UBS Global AM fully informed about any such actions
that it intends to take.
(e) The Sub-Adviser agrees that it will place orders with brokers
in accordance with best execution policies, taking into account best
price as an important factor in this decision, provided that, on
behalf of the Portfolio or Segment, the Sub-Adviser may, in its
discretion, use brokers that provide the Sub-Adviser with research,
analysis, advice and similar services to execute portfolio
transactions on behalf of the Portfolio or Segment, and the Sub-
Adviser may pay to those brokers in return for brokerage and research
services a higher commission than may be charged by other brokers,
subject to the Sub-Adviser's determination in good faith that such
commission is reasonable in terms either of the particular
transaction or of the overall responsibility of the Sub-Adviser to
the Portfolio or Segment and its other clients and that the total
commissions paid by the Portfolio or Segment will be reasonable in
relation to the benefits to the Portfolio or Segment over the long
term. In no instance will portfolio securities be purchased from or
sold to UBS Global AM or the Sub-Adviser, the Trust's principal
underwriter, or any affiliated person thereof, except in accordance
with the federal securities laws and the rules and regulations
thereunder. The Sub-Adviser may aggregate sales and purchase orders
with respect to the assets of the Portfolio or Segment with similar
orders being made simultaneously for other accounts advised by the
Sub-Adviser or its affiliates. Whenever the Sub-Adviser
simultaneously places orders to purchase or sell the same security on
behalf of the Portfolio or Segment and one or more other accounts
advised by the Sub-Adviser, the orders will be allocated as to price
and amount among all such accounts in a manner believed to be
equitable over time to each account. UBS Global AM recognizes that
in some cases this procedure may adversely affect the results
obtained for the Portfolio or Segment.
Subject to the Sub-Adviser's obligations to seek best execution, UBS
Global AM agrees that the Sub-Adviser, in its sole discretion, may
place transactions on behalf of the Portfolio or Segment and the
Trust with any broker-dealer deemed to be an affiliate (including
affiliated FCMs) of the Sub-Adviser (the "Affiliated Broker-Dealers")
so long as such transactions are effected in conformity with the
requirements (including any applicable exemptions and administrative
interpretations set forth in Part II of the Sub-Adviser's Form ADV
Registration Statement on file with the Securities and Exchange
Commission ("Form ADV")) of Section 11(a)(1)(H) of the Securities
Exchange Act of 1934 (the "1934 Act"), and in compliance with Rules
17e-1 or 10f-3 under the 1940 Act or other applicable rules and the
Trust's policies and procedures thereunder. In all such dealings,
the Affiliated Broker-Dealers shall be authorized and entitled to
retain any commissions, remuneration or profits which may be made in
such transactions and shall not be liable to account for the same to
UBS Global AM, the Portfolio or the Trust. In the event Sub-Adviser
becomes affiliated (as deemed under the federal securities laws) with
a broker-dealer during the term of this Agreement, Sub-Adviser shall
obtain the approval of the Trust's Board of Trustees prior to
commencement of transactions with such broker-dealer on behalf of the
Portfolio or the Trust.
UBS Global AM further authorizes the Sub-Adviser and its Affiliated
Broker-Dealers to execute agency cross transactions (the "Cross
Transactions") on behalf of the Portfolio and the Trust. Cross
Transactions are transactions which may be effected by the Affiliated
Broker-Dealers acting for both the Portfolio or the Trust and the
counterparty to the transaction. Cross Transactions enable the Sub-
Adviser to purchase or sell a block of securities for the Portfolio
or the Trust at a set price and possibly avoid an unfavorable price
movement that may be created through entrance into the market with
such purchase or sale order. As such, the Sub-Adviser believes that
Cross Transactions can provide meaningful benefits for the Portfolio
and the Trust and its clients generally. UBS Global AM, the
Portfolio and the Trust should be aware, however, that in a Cross
Transaction an Affiliated Broker-Dealer will be receiving commissions
from both sides of the trade and, therefore, there is a potentially
conflicting division of loyalties and responsibilities. Sub-Adviser
shall effect such Cross Transactions in compliance with Rule 206(3)-2
under the Advisers Act, Rule 17a-7 under the 1940 Act, and any other
applicable provisions of the federal securities laws and shall
provide UBS Global AM with periodic reports describing such agency
cross transactions. UBS Global AM understands that the authority of
the Sub-Adviser to execute agency Cross Transactions for the
Portfolio is terminable at will without penalty, effective upon
receipt by the Sub-Adviser of written notice from UBS Global AM, and
that the failure to terminate such authorization will result in its
continuation.
(f) The Sub-Adviser shall maintain separate detailed records of all
matters pertaining to the Portfolio or Segment, including, without
limitation, brokerage and other records of all securities
transactions. Any records required to be maintained and preserved
pursuant to the provisions of Rule 31a-1 and Rule 31a-2 promulgated
under the 1940 Act that are prepared or maintained by the Sub-Adviser
on behalf of the Trust are the property of the Trust and will be
surrendered promptly to the Trust upon request. The Sub-Adviser
further agrees to preserve for the periods prescribed in
Rule 31a-2 under the 1940 Act the records required to be maintained
under Rule 31a-1 under the 1940 Act, and will furnish the Board and
UBS Global AM with such periodic and special reports as the Board or
UBS Global AM may request.
(g) At such times as shall be reasonably requested by the Board or
UBS Global AM, the Sub-Adviser will provide the Board and UBS Global
AM with economic and investment analyses and reports as well as
quarterly reports setting forth the performance of the Portfolio or
Segment and make available to the Board and UBS Global AM any
economic, statistical and investment services that the Sub-Adviser
normally makes available to its institutional or other customers.
(h) In accordance with procedures adopted by the Board, as amended
from time to time, the Sub-Adviser is responsible for assisting the
Board and UBS Global AM in the fair valuation of all portfolio
securities in the Portfolio or Segment and will use its reasonable
efforts to arrange for the provision of a price or prices from one or
more parties independent of the Sub-Adviser for each portfolio
security for which the custodian does not obtain prices in the
ordinary course of business from an automated pricing service.
The Sub-Adviser also will provide such information or perform such
additional acts as are customarily performed by a Sub-Adviser and may
be required for the Trust or UBS Global AM to comply with their
respective obligations under applicable federal securities laws,
including, without limitation, the
1940 Act, the Advisers Act, the 1934 Act, the Securities Act, and any
rule or regulation thereunder.
3. Further Duties. In all matters relating to the performance of
this Agreement, the Sub-Adviser will seek to act in conformity with
the Trust's Trust Instrument, By-Laws and Registration Statement, the
Trust's policies and procedures for compliance by the Trust with the
Federal Securities Laws (as that term is defined in Rule 38a-1 under
the 1940 Act) provided to the Sub-Adviser (together, the "Trust
Compliance Procedures") and with the written instructions and written
directions of the Board and UBS Global AM, and will comply with the
requirements of the 1940 Act, and the Advisers Act, and the rules
under each, the Code, and all other federal and state laws and
regulations applicable to the Trust and the Portfolio. UBS Global AM
agrees to provide to the Sub-Adviser copies of the Trust's Trust
Instrument, By-Laws, Registration Statement, Trust's Compliance
Procedures, written instructions and directions of the Board and UBS
Global AM, and any amendments or supplements to any of these
materials as soon as practicable after such materials become
available. UBS Global AM further agrees to identify to the Sub-
Adviser in writing any broker-dealers that are affiliated with UBS
Global AM (other than UBS Financial Services Inc. and UBS Global
Asset Management (US) Inc.).
In order to assist the Trust and the Trust's Chief Compliance Officer
(the "Trust CCO") to satisfy the requirements contained in Rule 38a-1
under the 1940 Act, the Sub-Adviser shall provide to the Trust CCO:
(i) direct access to the Sub-Adviser's chief compliance officer
and/or other senior compliance
personnel, as reasonably requested by the Trust CCO; (ii) quarterly
reports confirming that the Sub-Adviser has complied with the Trust
Compliance Procedures in managing the Portfolio or Segment; and (iii)
quarterly certifications that there were no Material Compliance
Matters (as that term is defined by Rule 38a-1(e)(2)) that arose
under the Trust Compliance Procedures that related to the Sub-
Adviser's management of the Portfolio or Segment.
The Sub-Adviser shall promptly provide the Trust CCO with copies of:
(i) the Sub-Adviser's policies and procedures for compliance by the
Sub-Adviser with the Federal Securities Laws (together, the "Sub-
Adviser Compliance Procedures"), and (ii) any material changes to the
Sub-Adviser Compliance Procedures. The Sub-Adviser shall cooperate
fully with the Trust CCO so as to facilitate the Trust CCO's
performance of the Trust CCO's responsibilities under Rule 38a-1 to
review, evaluate and report to the Trust's Board on the operation of
the Sub-Adviser Compliance Procedures, and shall promptly report to
the Trust CCO any Material Compliance Matter arising under the Sub-
Adviser Compliance Procedures involving the Portfolio or Segment.
The Sub-Adviser shall provide to the Trust CCO: (i) quarterly
reports confirming the Sub-Adviser's compliance with the Sub-Adviser
Compliance Procedures in managing the Portfolio or Segment, and (ii)
certifications that there were no Material Compliance Matters
involving the Sub-Adviser that arose under the Sub-Adviser Compliance
Procedures that affected the Portfolio or Segment. At least
annually, the Sub-Adviser shall provide a certification to the Trust
CCO to the effect that the Sub-Adviser has in place and has
implemented policies and procedures that are reasonably designed to
ensure compliance by the Sub-Adviser with any applicable Federal
Securities Laws, subject to such interpretations as may be contained
in the Trust Compliance Procedures.
The Sub-Adviser will promptly provide UBS Global AM with information
(including information that is required to be disclosed in the
Trust's registration statement) with respect to the portfolio
managers responsible for the Portfolio or Segment and any changes in
the portfolio managers responsible for the Portfolio or Segment.
The Sub-Adviser will promptly notify UBS Global AM of any pending
investigation, material litigation, administrative proceeding or any
other significant regulatory inquiry.
The Sub-Adviser will cooperate promptly and fully with UBS Global AM
and/or the Trust in responding to any regulatory or compliance
examinations or inspections (including information requests) relating
to the Trust, the Portfolio or UBS Global AM brought by any
governmental or regulatory authorities having appropriate
jurisdiction (including, but not limited to, the Securities and
Exchange Commission ("SEC")).
4. Expenses. During the term of this Agreement, the Sub-Adviser
will bear all expenses incurred by it in connection with its services
under this Agreement. The Sub-Adviser shall not be responsible for
any expenses incurred by the Trust, the Portfolio or UBS Global AM,
except as otherwise specifically provided herein.
Upon request by UBS Global AM, Sub-Adviser agrees to reimburse UBS
Global Americas or the Trust for costs associated with generating and
distributing any Registration Statement (as defined herein) for when
the Sub-Adviser is given a copy of a draft of such Registration
Statement and fails to promptly disclose to UBS Global AM facts then
known to the Sub-Adviser or its personnel that would require
disclosure (or amendments to disclosure) in the Fund's Registration
Statement in time for such disclosure or amendments to disclosure to
be included in such Registration Statement. The Sub-Adviser shall
bear all reasonable expenses of the Trust, if any, arising out of an
assignment or change in control of the Sub-Adviser.
5. Compensation.
(a) For the services provided and the expenses assumed by the Sub-
Adviser pursuant to this Agreement, UBS Global AM, not the Portfolio,
will pay to the Sub-Adviser a fee, computed daily and payable
monthly, at an annual rate of 0.40% of the average daily net assets
of the Portfolio or Segment allocated to its management (computed in
the manner specified in the Management Agreement), and will provide
the Sub-Adviser with a schedule showing the manner in which the fee
was computed. If the Sub-Adviser is managing a Segment, its fees
will be based on the value of the assets of the Portfolio within the
Sub-Adviser's Segment.
(b) The fee shall be accrued daily and payable monthly to the Sub-
Adviser on or before the last business day of the next succeeding
calendar month.
(c) For those periods in which UBS Global AM has agreed to waive
all or a portion of its management fee, UBS Global AM may ask the
Sub-Adviser to waive the same proportion of its fees, but the Sub-
Adviser is under no obligation to do so.
(d) If this Agreement becomes effective or terminates before the
end of any month, the fee for the period from the effective date to
the end of the month or from the beginning of such month to the date
of termination, as the case may be, shall be pro-rated according to
the proportion which such period bears to the full month in that such
effectiveness or termination occurs.
6. Limitation of Liability.
(a) The Sub-Adviser shall not be liable for any error of judgment
or mistake of law or for any loss suffered by the Portfolio, the
Trust or its shareholders or by UBS Global AM in connection with the
matters to which this Agreement relates, except a loss resulting from
willful misfeasance, bad faith or gross negligence on its part in the
performance of its duties or from reckless disregard by it of its
obligations and duties under this Agreement.
(b) In no event will the Sub-Adviser have any responsibility for
any other portfolio of the Trust, for any portion of the Portfolio
not managed by the Sub-Adviser or for the acts or omissions of any
Other Sub-Adviser to the Trust or Portfolio. In particular, in the
event the Sub-Adviser shall manage only a Segment of the Portfolio,
the Sub-Adviser shall have no responsibility for the Portfolio's
being in violation of any applicable law or regulation or investment
policy or restriction applicable to the Portfolio as a whole or for
the Portfolio's failing to qualify as a regulated investment company
under the Code, if the securities and other holdings of the Segment
of the Portfolio managed by the
Sub-Adviser are such that such Segment would not be in such violation
or fail to so qualify if such Segment were deemed a separate series
of the Trust or a separate regulated investment company under the
Code, unless such violation was due to the Sub-Advisers failure to
comply with written guidelines adopted by the Board or UBS Global AM
and provided to the Sub-Adviser.
Nothing in this section shall be deemed a limitation or waiver of any
obligation or duty that may not by law be limited or waived.
7. Representations of Sub-Adviser. The Sub-Adviser represents,
warrants and agrees as follows:
(a) The Sub-Adviser (i) is registered as an investment adviser
under the Advisers Act and will continue to be so registered for so
long as this Agreement remains in effect; (ii) is not prohibited by
the 1940 Act or the Advisers Act from performing the services
contemplated by this Agreement; (iii) has met, and will seek to
continue to meet for so long as this Agreement remains in effect, any
other applicable federal or state requirements, or the applicable
requirements of any regulatory or industry
self-regulatory agency, necessary to be met in order to perform the
services contemplated by this Agreement; (iv) has the authority to
enter into and perform the services contemplated by this Agreement;
and (v) will promptly notify UBS Global AM of the occurrence of any
event that would disqualify the Sub-Adviser from serving as an
investment adviser of an investment company pursuant to Section 9(a)
of the 1940 Act or otherwise.
(b) The Sub-Adviser has adopted a written code of ethics complying
with the requirements of Rule 17j-1 under the 1940 Act and Rule 204A-
1 under the Advisers Act and will provide UBS Global AM and the Board
with a copy of such code of ethics, together with evidence of its
adoption. Within fifteen days of the end of the last calendar quarter
of each year that this Agreement is in effect, a duly authorized
officer of the Sub-Adviser shall certify to UBS Global AM that the
Sub-Adviser has complied with the requirements of Rule 17j-1 during
the previous year and that there has been no material violation of
the Sub-Adviser's code of ethics or, if such a violation has
occurred, that appropriate action was taken in response to such
violation. Upon the written request of UBS Global AM, the Sub-Adviser
shall permit UBS Global AM, its employees or its agents to examine
the reports required to be made by the Sub-Adviser pursuant to Rule
17j-1(c)(1) and all other records relevant to the Sub-Adviser's code
of ethics.
(c) The Sub-Adviser has provided UBS Global AM with a copy of its
Form ADV, as most recently filed with the SEC, and promptly will
furnish a copy of all amendments to UBS Global AM at least annually.
(d) The Sub-Adviser will notify UBS Global AM of any change of
control of the Sub-Adviser, including any change of its general
partners or 25% shareholders or 25% limited partners, as applicable,
and any changes in the key personnel who are either the portfolio
manager(s) of the Portfolio or senior management of the Sub-Adviser,
in each case prior to or as soon after such change as possible.
(e) The Sub-Adviser agrees that neither it nor any of its
affiliates, will in any way refer directly or indirectly to its
relationship with the Trust, the Portfolio, UBS Global AM or any of
their respective affiliates in offering, marketing or other
promotional materials without the express written consent of UBS
Global AM.
(f) The Sub-Adviser hereby represents that it has implemented
policies and procedures that will prevent the disclosure by it, its
employees or its agents of the Trust's portfolio holdings to any
person or entity other than UBS Global AM, the Trust's custodian, or
other persons expressly designated by UBS Global AM. The Sub-Adviser
further represents that it implemented policies and procedures to
prevent it, its employees and agents from trading on the basis of any
material non-public information provided by UBS Global AM, the Trust,
their affiliates or agents.
8. Services Not Exclusive. The services furnished by the Sub-
Adviser hereunder are not to be deemed exclusive, and except as the
Sub-Adviser may otherwise agree in writing, the Sub-Adviser shall be
free to furnish similar services to others so long as its services
under this Agreement are not impaired thereby. Nothing in this
Agreement shall limit or restrict the right of any director, officer
or employee of the Sub-Adviser, who may also be a trustee, officer or
employee of the Trust, to engage in any other business or to devote
his or her time and attention in part to the management or other
aspects of any other business, whether of a similar nature or a
dissimilar nature.
9. Duration and Termination.
(a) This Agreement shall become effective upon termination of the
Sub-Advisory Agreement dated as of November 17, 2009 between UBS
Global AM and ING Clarion Real Estate Securities, LLC due to an
assignment or change in control, provided that this Agreement shall
not take effect unless it has first been approved (i) by a vote of a
majority of those trustees of the Trust who are not parties to this
Agreement or interested persons of any such party ("Independent
Trustees"), cast in person at a meeting called for the purpose of
voting on such approval, and (ii) by vote of a majority of the
Portfolio's outstanding voting securities, unless UBS Global AM has
authority to enter into this Agreement pursuant to exemptive relief
from the SEC without a vote of the Portfolio's outstanding voting
securities.
(b) Unless sooner terminated as provided herein, this Agreement
shall continue in effect for two years from its effective date.
Thereafter, if not terminated, this Agreement shall continue
automatically for successive periods of twelve months each, provided
that such continuance is specifically approved at least annually (i)
by a vote of a majority of the Independent Trustees,
cast in person at a meeting called for the purpose of voting on such
approval, and (ii) by the Board or by vote of a majority of the
outstanding voting securities of the Portfolio.
(c) Notwithstanding the foregoing, this Agreement may be terminated
at any time, without the payment of any penalty, by vote of the Board
or by a vote of a majority of the outstanding voting securities of
the Portfolio on 30 days written notice to the Sub-Adviser. This
Agreement may also be terminated, without the payment of any penalty,
by UBS Global AM; (i) upon 120 days written notice to the Sub-
Adviser; (ii) upon material breach by the Sub-Adviser of any of the
representations, warranties and agreements set forth in Paragraph 7
of this Agreement; or (iii) immediately if, in the reasonable
judgment of UBS Global AM, the Sub-Adviser becomes unable to
discharge its duties and obligations under this Agreement, including
circumstances such as financial insolvency of the Sub- Adviser or
other circumstances that could adversely affect the Portfolio. The
Sub-Adviser may terminate this Agreement at any time, without the
payment of any penalty, on 120 days written notice to UBS Global AM.
This Agreement will terminate automatically in the event of its
assignment or upon termination of the Investment Advisory Agreement,
as it relates to this Portfolio.
10. Amendment of this Agreement. No provision of this Agreement
may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom enforcement
of the change, waiver, discharge or termination is sought. To the
extent required by applicable law, no amendment of this Agreement
shall be effective until approved (i) by a vote of a majority of the
Independent Trustees, and (ii) if the terms of this Agreement shall
have changed, by a vote of a majority of the Portfolio's outstanding
voting securities (except in the case of (ii), pursuant to the terms
and conditions of the SEC order permitting it to modify the Agreement
without such vote).
11. Governing Law. This Agreement shall be construed in accordance
with the 1940 Act and the laws of the State of New York, without
giving effect to the conflicts of laws principles thereof. To the
extent that the applicable laws of the State of New York conflict
with the applicable provisions of the 1940 Act, the latter shall
control.
12. Confidentiality. The Sub-Adviser will treat as proprietary and
confidential any information obtained in connection with its duties
hereunder, including all records and information pertaining to the
Portfolio and its prior, present or potential shareholders. The Sub-
Adviser will not use such information for any purpose other than the
performance of its responsibilities and duties hereunder. Such
information may not be disclosed except after prior notification to
and approval in writing by the Portfolio or if such disclosure is
expressly required or requested by applicable federal or state or
other regulatory authorities.
13. Use of Name.
(a) It is understood that the names UBS and PACE or any derivative
thereof or logo associated with that name is the valuable property of
UBS Global AM and/or its affiliates, and that Sub-Adviser has the
right to use such name (or derivative or logo) only with the approval
of UBS Global AM and only so long as UBS Global AM is Manager to the
Trust and/or the Portfolio.
(b) It is understood that the name CBRE Clarion Securities or any
derivative thereof or logo associated with those names, are the
valuable property of the Sub-Adviser and its affiliates and that the
Trust and/or the Portfolio have the right to use such names (or
derivative or logo) in offering materials of the Trust with the
approval of the Sub-Adviser and for so long as the Sub-Adviser is a
Sub-Adviser to the Portfolio. Upon termination of this Agreement,
the Trust shall forthwith cease to use such names (or derivatives or
logo).
14. Miscellaneous. The captions in this Agreement are included for
convenience of reference only and in no way define or delimit any of
the provisions hereof or otherwise affect their construction or
effect. If any provision of this Agreement shall be held or made
invalid by a court decision, statute, rule or otherwise, the
remainder of this Agreement shall not be affected thereby. This
Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors. As used in this
Agreement, the terms majority of the outstanding voting securities,
affiliated person, interested person, assignment, broker, investment
adviser, net assets, sale, sell and security shall have the same
meanings as such terms have in the 1940 Act, subject to such
exemption as may be granted by the SEC by any rule, regulation or
order. Where the effect of a requirement of the federal securities
laws reflected in any provision of this Agreement is made less
restrictive by a rule, regulation or order of the SEC, whether of
special or general application, such provision shall be deemed to
incorporate the effect of such rule, regulation or order. This
Agreement may be signed in counterpart.
15. Notices. Any notice herein required is to be in writing and is
deemed to have been given to the Sub-Adviser or UBS Global AM upon
receipt of the same at their respective addresses set forth below.
All written notices required or permitted to be given under this
Agreement will be delivered by personal service, by postage mail
return receipt requested or by facsimile machine or a similar means
of same delivery which provides evidence of receipt (with a
confirming copy by mail as set forth herein). All notices provided
to UBS Global AM will be sent to the attention of: General Counsel,
UBS Global Asset Management (Americas) Inc., 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, XX 00000. All notices provided to the Sub-
Adviser will be sent to the attention of: CBRE Clarion Securities,
LLC, 000 Xxxx xx Xxxxxxxx Xxxx, Xxxxxx, Xxxxxxxxxxxx 00000 Attn:
General Counsel.
In witness whereof, the parties hereto have caused this instrument to
be executed by their duly authorized signatories as of the date and
year first above written.
UBS Global Asset Management (Americas) Inc.
0000 Xxxxxx xx xxx Xxxxxxxx
Xxxxxx: Xxx Xxxx, XX 00000
By:/s/Xxxx Xxxxxxx By:/s/Xxxxxx Xxx
Name: Xxxx Xxxxxxx Name: Xxxxxx Xxx
Title: Director Title: Executive Director
CBRE Clarion Securities, LLC
000 Xxxx xx Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx: Xxxxxx, XX 00000
By: /s/Xxxxxxx X. Xxxxxxx By: /s/Xxxxx X. Xxxxxxxx
Name: Xxxxxxx X. Xxxxxxx Name: Xxxxx X. Xxxxxxxx
Title: General Counsel Title: Chief Operating Officer
